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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F







| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended June 30, 2014

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Commission file number 001-35723





BRASILAGRO
 COMPANHIA BRASILEIRA DE

PROPRIEDADES AGRÍCOLAS

(Exact name of Registrant as specified in its charter)

Brasilagro - Brazilian Agricultural Real Estate Company

(Translation of issuers name into English)

The Federative Republic of Brazil

(Jurisdiction of incorporation or organization)

1309 Av. Brigadeiro Faria Lima, 5th floor, São Paulo, São Paulo 01452-002, Brazil

(Address of principal executive offices)

Julio Cesar de Toledo Piza Neto,

Chief Executive Officer and Investor Relations Officer,

Tel. +55 11 3035 5350, Fax +55 11 5908 4344, ri@brasil-agro.com

1309 Av. Brigadeiro Faria Lima, 5th floor

São Paulo, São Paulo 01452-002, Brazil

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)





Securities registered or to be registered pursuant to Section 12(b) of the Act:



|                                                                               |  |                                          
|------------------------------------------------------------------------------ |  | -----------------------------------------
|Title of each class                                                            |  | Name of each exchange on which registered
|American Depositary Shares, each representing one ordinary share, no par value |  | New York Stock Exchange                  
|Ordinary Shares*                                                               |  | New York Stock Exchange*                 



|* | Not for trading, but only in connection with the registration of American Depositary Shares.
|- | --------------------------------------------------------------------------------------------





Securities
registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None

Indicate number of outstanding shares of each of the issuers
classes of capital or common stock as of the close of the period covered by the Annual Report.

Ordinary shares, no par
value                    58,422,400

Brasilagro  Brazilian Agricultural Real Estate Company is an emerging growth company as defined in Section 3(a) of the Securities
Exchange Act of 1934.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes   ̈     No  x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.     Yes   ̈    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈ (Note: None required for registrant)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act (check one):

Large accelerated
filer   ̈                    Accelerated
filer   ̈                    Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:



|             |  |                                                                                                          |  |         
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | --------
|U.S. GAAP   ̈ |  | International Financial Reporting Standards as issued by the International Accounting Standards Board  x |  | Other   ̈

If Other has been checked in response to the previous question, indicate by check mark which
financial statement item the registrant has elected to follow.    
Item 17   ̈    Item 18   ̈

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x



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TABLE OF CONTENTS



|                                                                                       |  |      |     | 
|-------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                                                                       |  | Page |    
|PART I                                                                                 |  |      | 1   | 
|INTRODUCTION                                                                           |  |      | 1   | 
|ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                         |  |      | 3   | 
|ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE                                       |  |      | 3   | 
|ITEM 3  KEY INFORMATION                                                               |  |      | 3   | 
|ITEM 4  INFORMATION ON THE COMPANY                                                    |  |      | 21  | 
|ITEM 4A  UNRESOLVED STAFF COMMENTS                                                    |  |      | 33  | 
|ITEM 5  OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                  |  |      | 33  | 
|ITEM 6  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                    |  |      | 51  | 
|ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                             |  |      | 59  | 
|ITEM 8  FINANCIAL INFORMATION                                                         |  |      | 62  | 
|ITEM 9  THE OFFER AND LISTING                                                         |  |      | 70  | 
|ITEM 10  ADDITIONAL INFORMATION                                                       |  |      | 75  | 
|ITEM 11  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |  |      | 103 | 
|ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |  |      | 105 | 
|PART II                                                                                |  |      | 106 | 
|ITEM 13  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  |      | 106 | 
|ITEM 14  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  |      | 106 | 
|ITEM 15  CONTROLS AND PROCEDURES                                                      |  |      | 106 | 
|ITEM 16A  AUDIT COMMITTEE FINANCIAL EXPERT                                            |  |      | 107 | 
|ITEM 16B  CODE OF ETHICS                                                              |  |      | 107 | 
|ITEM 16C  PRINCIPAL ACCOUNTANT FEES AND SERVICES                                      |  |      | 108 | 
|ITEM 16D  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  |  |      | 108 | 
|ITEM 16E  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      |  |      | 109 | 
|ITEM 16F  CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                |  |      | 109 | 
|ITEM 16G  CORPORATE GOVERNANCE                                                        |  |      | 109 | 
|ITEM 16H  MINE SAFETY DISCLOSURE                                                      |  |      | 111 | 
|PART III                                                                               |  |      | 111 | 
|ITEM 17  FINANCIAL STATEMENTS                                                         |  |      | 111 | 
|ITEM 18  FINANCIAL STATEMENTS                                                         |  |      | 111 | 
|ITEM 19  EXHIBITS                                                                     |  |      | 111 | 



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PART I

INTRODUCTION

Unless the context otherwise requires, the terms Brazil and the Brazilian government refer to the
Federative Republic of Brazil; the term Brasilagro refers to Brasilagro  Companhia Brasileira de Propriedades Agrícolas and its consolidated subsidiaries; and unless indicated otherwise, the terms we, the
Company, our or us refer to Brasilagro.

Presentation of Financial Information

All references herein to real, Reais or R$ are to the Brazilian real, the official currency of Brazil. All
references to U.S. dollars, dollars or US$ are to U.S. dollars.

On June 30, 2014, the
year-end of our fiscal year, the exchange rate for Reais into U.S. dollars was R$2.2025 to US$1.00, based on the selling rate as reported by the Central Bank of Brazil (Banco Central do Brasil), or the Central Bank. On June 30, 2013, the
selling rate was R$2.2156 to US$1.00. The selling rate was R$2.0213 to US$1.00 at June 30, 2012, R$1.5611 to US$1.00 at June 30, 2011, and R$1.8015 to US$1.00 at June 30, 2010, in each case, as reported by the Central Bank. The
Real/U.S. dollar exchange rate fluctuates widely, and the selling rate at June 30, 2014 may not be indicative of future exchange rates. See Item 3Key InformationExchange Rates for information regarding exchange
rates for the Real since January 1, 2010.

Solely for the convenience of the reader, we have translated certain amounts included in
Item 3Key InformationSelected Financial Information in this Annual Report from Reais into U.S. dollars, unless otherwise indicated, using the selling rate as reported by the Central Bank at June 30, 2014 of R$2.2025 to
US$1.00. These translations should not be considered representations that any such amounts have been, could have been or could be converted into U.S. dollars at that or at any other exchange rate.

Financial Statements

We maintain our
books and records in Reais. Our fiscal year is from July 1 of each year to June 30 of the following year. Our consolidated financial statements as of June 30, 2014, June 30, 2013 and 2012 and for the years ended
June 30, 2014, 2013 and 2012 have been audited, as stated in the report annexed hereto.

We prepare our annual consolidated financial
statements in compliance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB. Our consolidated financial statements as of and for the year ended June 30, 2011 are our
first annual consolidated financial statements prepared in compliance with IFRS. IFRS 1, First-time Adoption of International Reporting Standards, has been applied in preparing these consolidated financial statements.

As required under Brazilian corporate law, we also prepare parent-company financial statements, in accordance with accounting principles
generally accepted in Brazil (Brazilian GAAP). Our parent-company financial statements are statutorily required for certain purposes, including for calculation of dividends. Brazilian GAAP, as applied in the preparation of our
parent-company financial statements, differs from IFRS as issued by the IASB in that (1) Brazilian GAAP requires presentation of a value added statement, and (2) Brazilian GAAP requires the application of the equity method of accounting in
investments in associates and subsidiaries while under IFRS as issued by the IASB these are recorded either at their cost or fair value. The parent-company financial statements under Brazilian GAAP are not presented herein.

Crop Year, Harvest and Planting Season

Our agricultural production is based on the crop year, which varies according to each crop. The crop year for sugarcane is from January 1
to December 31 of the same year, and the crop year for grains is from July 1 to June 30 of the following year. We also make reference to the planting season and the harvest season, or harvest period. In Brazil, the planting season for
grains is from September to December, and the planting season for sugarcane is from February to May. The harvesting period in Brazil for grains is from February to July, and such period for sugarcane is from April to December.

Market Information

The market
information included herein concerning the Brazilian economy and the domestic and international agriculture industry was obtained from market research, publicly available information and industry publications from established public sources, such as
the Brazilian Central Bank, the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística), or the IBGE, the Brazilian Food Supply Company (Companhia Nacional de Abastecimento), or Conab, a
state-owned company, the Brazilian Ministry of Agriculture, Livestock and Food Supply (Ministério da Agricultura, Pecuária e Abastecimento), or MAPA, the



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U.S. Department of Agriculture, or USDA, the U.S. Food and Agriculture Organization, or FAO, the United Nations, and the Organization for Economic Cooperation and Development, or OECD, as well as
from other public institutions and independent sources as indicated throughout this Annual Report. We believe that such information is true and accurate as of the date of this Annual Report, although we have not independently verified it.

Rounding

Some percentages and amounts
included herein have been rounded for ease of presentation. Accordingly, figures shown as totals in certain tables may not be arithmetic aggregations of the figures that precede them.

Emerging Growth Company Status

We are an
emerging growth company, as defined in Section 3(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible
to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor
attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, or any Public Company Accounting Oversight Board, or PCAOB rules, that, if adopted in the future, would require mandatory audit
firm rotation and auditor discussion and analysis and any future audit rule promulgated by the PCAOB (unless the SEC determines otherwise). We take advantage of the exemption to provide an auditors attestation report and may decide to rely on
other exemptions in the future. We do not know if some investors will find our common stock less attractive as a result. The result may be a less active trading market for our common stock and our stock price may be more volatile.

We could remain an emerging growth company until the earliest of (a) the last day of the first fiscal year in which our
annual gross revenues exceed $1 billion, (b) the last day of our fiscal year following the fifth anniversary of the date of our first sale of our common equity securities pursuant to an effective registration statement under the Securities Act,
(c) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period, or (d) the date that we become a large accelerated filer as defined in Rule 12b-2 under the Exchange Act,
which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.

Forward-Looking Statements

This Annual
Report on Form 20-F includes statements that constitute forward-looking statements. These statements are based on the beliefs and assumptions of our management and on information available to management at the time such statements were made.
Forward-looking statements include, but are not limited to: (a) information concerning possible or assumed future results of our operations, earnings, industry conditions, demand and pricing for our services and other aspects of our business
under Item 4Information on the Company, Item 5Operating and Financial Review and Prospects and Item 11Quantitative and Qualitative Disclosures About Market Risk; and (b) statements that are
preceded by, followed by or include the words believes, expects, anticipates, intends, is confident, plans, estimates, may, might,
could, will, would, the negatives of such terms or similar expressions.

Forward-looking statements
are not guarantees of future performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ
materially from our expectations. Many of the factors that will determine these results are beyond our ability to control or predict. We do not intend to review or revise any particular forward-looking statements referenced in this Annual Report in
light of future events or to provide reasons why actual results may differ therefrom. Investors are cautioned not to put undue reliance on any forward-looking statements.

Any of the following important factors, and those described elsewhere in this Annual Report on Form 20-F or in other of our filings with the
U.S. Securities and Exchange Commission, or the SEC, among other things, could cause our results to differ from any results that might be projected, forecasted or estimated by us in any such forward-looking statements:



| |  |  | the economic, political and business situation in Brazil;
| | - |  | ---------------------------------------------------------



| |  |  | inflation, depreciation or appreciation of the Real against foreign currencies and interest rate fluctuations;
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | changes in prices in the Brazilian agricultural real estate sector;
| | - |  | -------------------------------------------------------------------



| |  |  | developments in, or changes to, Brazilian legislation and regulation governing our business and products or failure to comply with them, including environmental and sanitary liabilities and accounting developments;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | governmental intervention impacting the economy, taxes or tariffs;
| | - |  | ------------------------------------------------------------------



| |  |  | loss of investment grade ratings for Brazil as issued by any of the international rating agencies;
| | - |  | --------------------------------------------------------------------------------------------------



| |  |  | conditions of transportation infrastructure and logistics in Brazil;
| | - |  | --------------------------------------------------------------------



| |  |  | our ability to execute our business strategy successfully, including our ability to finance our operations at reasonable terms and conditions, if necessary;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our level of debt and other obligations;
| | - |  | ----------------------------------------



| |  |  | changes in the domestic and international agricultural commodity markets;
| | - |  | -------------------------------------------------------------------------



| |  |  | availability and changes in prices of raw materials, skilled labor, oil and oil products, fertilizers, lime, machinery and other agricultural inputs;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | outbreaks of diseases affecting our farms and crops;
| | - |  | ----------------------------------------------------



| |  |  | our ability to obtain and maintain environmental permits for our existing or new areas of operations;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | supply and demand for our products;
| | - |  | -----------------------------------



| |  |  | weather conditions in our areas of operations;
| | - |  | ----------------------------------------------



| |  |  | the interests of our controlling shareholder, Cresud;
| | - |  | -----------------------------------------------------



| |  |  | other factors that may affect our financial condition, liquidity and operating result, and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | other risks discussed under Item 3Key Information-Risk Factors.
| | - |  | ------------------------------------------------------------------

We
undertake no obligation to publicly update any forward-looking statement, whether because of new information, future events or otherwise.

ITEM 1IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2OFFER
STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3KEY INFORMATION

A. Selected Consolidated Financial Data

We prepared our annual consolidated financial statements in compliance with IFRS as issued by the IASB. We adopted IFRS for the fiscal year
ended June 30, 2011 and retrospectively applied IFRS to the fiscal year ended June 30, 2010 for comparative purposes. IFRS differs in certain significant respects from the accounting principles generally accepted in the United States, or
U.S. GAAP.



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Due to the nature of our business and the harvesting periods in the locations where we operate,
our fiscal year ends on June 30 of each year. References in this Annual Report on Form 20-F to a specific fiscal year relate to the fiscal year ended on June 30 of that calendar year, unless indicated otherwise.

The selected financial data has been derived from our audited consolidated financial statements as of June 30, 2014, 2013, 2012, 2011 and
2010 and for the years ended June 30, 2014, 2013, 2012, 2011 and 2010 prepared in compliance with IFRS as issued by the IASB. The information set forth below is qualified by reference to, and should be read in conjunction with, our audited
consolidated financial statements and the notes thereto and also Item 5Operating and Financial Review and Prospects included in this Annual Report.



|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|-------------------------------------------------------------------------------------------------- |  | -------------------------------------------------- | ---------- | - | ----------------------------------------------------- |  | ---------- | ---- |  |  | ---------- | - |  | ---- | ---------- | - | ---- |  | ---------- | - |  |  | ---------- | -
|                                                                                                   |  | Year ended June 30,                                |           
|                                                                                                   |  | 2014                                               |            |   | 2014                                                  |  |            | 2013 |  |  | 2012       |   |  | 2011 |            |   | 2010 | 
|                                                                                                   |  | (US$thousand,except shareand per shareinformation) |            |   | (R$ thousand, except share and per share information) | 
|CONSOLIDATED STATEMENT OF OPERATIONS                                                               |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Net revenue                                                                                        |  |                                                    | 59,620     |   |                                                       |  | 131,314    |      |  |  | 185,647    |   |  |      | 146,218    |   |      |  | 79,544     |   |  |  | 36,745     |  
|Gain on sale of farms                                                                              |  |                                                    | 9,918      |   |                                                       |  | 21,845     |      |  |  | 54,815     |   |  |      | 12,987     |   |      |  |           |   |  |  |           |  
|Changes in fair value of biological assets and agricultural product                                |  |                                                    | 496        |   |                                                       |  | 1,092      |      |  |  | 2,289      |   |  |      | (417       | ) |      |  | 22,761     |   |  |  | (25,076    | )
|(Impairment) Reversal of impairment of net realizable value of agricultural products after harvest |  |                                                    | (928       | ) |                                                       |  | (2,043     | )    |  |  | 1,659      |   |  |      | (2,663     | ) |      |  | (986       | ) |  |  | (2,059     | )
|Cost of sales                                                                                      |  |                                                    | (62.899    | ) |                                                       |  | (138,535   | )    |  |  | (170,643   | ) |  |      | (136,447   | ) |      |  | (61,500    | ) |  |  | (30,310    | )
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Gross profit (loss)                                                                                |  |                                                    | 6,207      |   |                                                       |  | 13,673     |      |  |  | 73,767     |   |  |      | 19,678     |   |      |  | 39,819     |   |  |  | (20,700    | )
|Selling expenses                                                                                   |  |                                                    | (4,649     | ) |                                                       |  | (10,239    | )    |  |  | (14,028    | ) |  |      | (4,015     | ) |      |  | (2,991     | ) |  |  | (2,175     | )
|General and administrative expenses                                                                |  |                                                    | (13,793    | ) |                                                       |  | (30,378    | )    |  |  | (29,233    | ) |  |      | (28,892    | ) |      |  | (26,330    | ) |  |  | (22,916    | )
|Other operating income (expense), net                                                              |  |                                                    | 129        |   |                                                       |  | 285        |      |  |  | (3,539     | ) |  |      | 10         |   |      |  | 73         |   |  |  | 416        |  
|Equity pick up                                                                                     |  |                                                    | (320       | ) |                                                       |  | (704       | )    |  |  |           |   |  |      |           |   |      |  |           |   |  |  |           |  
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Operating income (loss)                                                                            |  |                                                    | (12,426    | ) |                                                       |  | (27,363    | )    |  |  | 26,967     |   |  |      | (13,219    | ) |      |  | 10,571     |   |  |  | (45,375    | )
|Financial income                                                                                   |  |                                                    | 18,184     |   |                                                       |  | 40,051     |      |  |  | 38,000     |   |  |      | 38,073     |   |      |  | 25,738     |   |  |  | 24,147     |  
|Financial expenses                                                                                 |  |                                                    | (18,893    | ) |                                                       |  | (41,611    | )    |  |  | (38,591    | ) |  |      | (44,299    | ) |      |  | (16,460    | ) |  |  | (8,368     | )
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Profit (loss) before income and social contribution taxes                                          |  |                                                    | (13,135    | ) |                                                       |  | (28,923    | )    |  |  | 26,376     |   |  |      | (19,445    | ) |      |  | 19,849     |   |  |  | (29,596    | )
|Income and social contribution taxes                                                               |  |                                                    | 7,065      |   |                                                       |  | 15,561     |      |  |  | 2,351      |   |  |      | 12,845     |   |      |  | (5,186     | ) |  |  | 10,108     |  
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Profit (loss) for the year                                                                         |  |                                                    | (6,070     | ) |                                                       |  | (13,362    | )    |  |  | 28,727     |   |  |      | (6,600     | ) |      |  | 14,663     |   |  |  | (19,488    | )
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Profit (loss) attributable to equity holders of the parent                                         |  |                                                    | (6,070     | ) |                                                       |  | (13,362    | )    |  |  | 28,727     |   |  |      | (5,572     | ) |      |  | 14,743     |   |  |  | (18,434    | )
|Loss attributable to non-controlling interests                                                     |  |                                                    |           |   |                                                       |  |           |      |  |  |           |   |  |      | (1,028     | ) |      |  | (80        | ) |  |  | (1,054     | )
|Outstanding shares at the year end                                                                 |  |                                                    | 58,422,400 |   |                                                       |  | 58,422,400 |      |  |  | 58,422,400 |   |  |      | 58,422,400 |   |      |  | 58,422,400 |   |  |  | 58,422,400 |  
|Basic earnings (loss) per share                                                                    |  |                                                    | (0.10      | ) |                                                       |  | (0.23      | )    |  |  | 0.49       |   |  |      | (0.10      | ) |      |  | 0.25       |   |  |  | (0.32      | )
|Diluted earnings (loss) per share                                                                  |  |                                                    | (0.10      | ) |                                                       |  | (0.23      | )    |  |  | 0.49       |   |  |      | (0.10      | ) |      |  | 0.25       |   |  |  | (0.32      | )
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|CONSOLIDATED CASH FLOW                                                                             |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Net cash flows from (used in) operating activities                                                 |  |                                                    | 10,388     |   |                                                       |  | 22,880     |      |  |  | (46,472    | ) |  |      | (10,691    | ) |      |  | (32,633    | ) |  |  | (38,962    | )
|Net cash flows from (used in) investment activities                                                |  |                                                    | (4,472     | ) |                                                       |  | (9,850     | )    |  |  | 54,085     |   |  |      | (24,375    | ) |      |  | (33,998    | ) |  |  | (60,733    | )
|Net cash flows from (used in) financing activities                                                 |  |                                                    | (899       | ) |                                                       |  | (1,979     | )    |  |  | 617        |   |  |      | (33,085    | ) |      |  | (3,954     | ) |  |  | 41,525     |  
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  
|Increase (decrease) in cash and cash equivalents                                                   |  |                                                    | 5,017      |   |                                                       |  | 11,051     |      |  |  | 8,230      |   |  |      | (68,151    | ) |      |  | (70,585    | ) |  |  | (58,170    | )
|                                                                                                   |  |                                                    |            |   |                                                       |  |            |      |  |  |            |   |  |      |            |   |      |  |            |   |  |  |            |  



4



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##### Table of Contents

|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|--------------------------------------------- |  | -------------- | ------- | - | ------------- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------- | - | ---- |  | ------- | - |  |  | ------- | -
|                                              |  | As of June 30, |        
|                                              |  | 2014           |         |   | 2014          |  |         | 2013 |  |  | 2012    |   |  | 2011 |         |   | 2010 | 
|                                              |  | (US$thousand)  |         |   | (R$ thousand) | 
|CONSOLIDATED BALANCE SHEET                    |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Assets                                        |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Current assets                                |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Cash and cash equivalents                     |  |                | 39,385  |   |               |  | 86,745  |      |  |  | 75,694  |   |  |      | 67,464  |   |      |  | 135,615 |   |  |  | 206,200 |  
|Marketable securities                         |  |                | 9,776   |   |               |  | 21,532  |      |  |  | 9,244   |   |  |      |        |   |      |  |        |   |  |  |        |  
|Trade Accounts receivable                     |  |                | 29,516  |   |               |  | 65,010  |      |  |  | 131,102 |   |  |      | 60,655  |   |      |  | 25,971  |   |  |  | 17,773  |  
|Inventories                                   |  |                | 18,257  |   |               |  | 40,210  |      |  |  | 28,805  |   |  |      | 72,558  |   |      |  | 77,479  |   |  |  | 16,032  |  
|Biological assets                             |  |                | 645     |   |               |  | 1,421   |      |  |  | 1,201   |   |  |      | 4,111   |   |      |  | 1,335   |   |  |  | 1,001   |  
|Recoverable taxes                             |  |                | 1,702   |   |               |  | 3,749   |      |  |  | 7,655   |   |  |      | 9,331   |   |      |  | 4,307   |   |  |  | 3,358   |  
|Derivative financial instruments              |  |                | 8,288   |   |               |  | 18,255  |      |  |  | 17,081  |   |  |      | 4,327   |   |      |  | 5,386   |   |  |  | 1,180   |  
|Transactions with related parties             |  |                | 328     |   |               |  | 723     |      |  |  | 347     |   |  |      |        |   |      |  |        |   |  |  | 415     |  
|Other assets                                  |  |                | 201     |   |               |  | 442     |      |  |  | 430     |   |  |      | 710     |   |      |  | 921     |   |  |  | 15      |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Total current assets                          |  |                | 108,099 |   |               |  | 238,087 |      |  |  | 271,559 |   |  |      | 219,156 |   |      |  | 251,014 |   |  |  | 245,974 |  
|Non-current assets                            |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Biological assets                             |  |                | 14,167  |   |               |  | 31,202  |      |  |  | 36,656  |   |  |      | 31,931  |   |      |  | 40,334  |   |  |  | 38,696  |  
|Restricted marketable securities              |  |                | 6,257   |   |               |  | 13,782  |      |  |  | 17,988  |   |  |      | 23,197  |   |      |  | 21,262  |   |  |  | 26,562  |  
|Receivables from related parties              |  |                | 11,836  |   |               |  | 26,068  |      |  |  |        |   |  |      |        |   |      |  | 7,118   |   |  |  | 6,060   |  
|Recoverable taxes                             |  |                | 13,552  |   |               |  | 29,849  |      |  |  | 25,736  |   |  |      | 22,803  |   |      |  | 25,784  |   |  |  | 17,655  |  
|Deferred taxes                                |  |                | 19,775  |   |               |  | 43,554  |      |  |  | 25,216  |   |  |      | 14,960  |   |      |  |        |   |  |  | 3,370   |  
|Derivative financial instruments              |  |                | 29      |   |               |  | 63      |      |  |  | 1,714   |   |  |      |        |   |      |  |        |   |  |  |        |  
|Trade accounts receivable                     |  |                | 17,005  |   |               |  | 37,453  |      |  |  | 33,729  |   |  |      | 12,759  |   |      |  | 2,936   |   |  |  | 4,293   |  
|Investment properties                         |  |                | 152,010 |   |               |  | 334,803 |      |  |  | 339,108 |   |  |      | 391,907 |   |      |  | 383,687 |   |  |  | 357,473 |  
|Other assets                                  |  |                | 2,109   |   |               |  | 4,644   |      |  |  | 1,633   |   |  |      | 268     |   |      |  | 94      |   |  |  | 24      |  
|Investments in unquoted equity instruments    |  |                | 22,869  |   |               |  | 50,369  |      |  |  | 70      |   |  |      | 410     |   |      |  | 410     |   |  |  | 410     |  
|Property, plant and equipment                 |  |                | 6,148   |   |               |  | 13,542  |      |  |  | 14,851  |   |  |      | 15,630  |   |      |  | 12,765  |   |  |  | 7,216   |  
|Intangible assets                             |  |                | 2,255   |   |               |  | 4,966   |      |  |  | 2,570   |   |  |      | 2,741   |   |      |  | 2,747   |   |  |  | 2,288   |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Total non-current assets                      |  |                | 268,012 |   |               |  | 590,295 |      |  |  | 499,271 |   |  |      | 516,606 |   |      |  | 497,137 |   |  |  | 464,047 |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Total assets                                  |  |                | 376,110 |   |               |  | 828,382 |      |  |  | 770,830 |   |  |      | 735,762 |   |      |  | 748,151 |   |  |  | 710,021 |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Liabilities and equity                        |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Current liabilities                           |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Trade accounts payable                        |  |                | 3,704   |   |               |  | 8,158   |      |  |  | 7,777   |   |  |      | 4,151   |   |      |  | 2,435   |   |  |  | 1,803   |  
|Loans and financing                           |  |                | 28,265  |   |               |  | 62,253  |      |  |  | 44,929  |   |  |      | 43,067  |   |      |  | 37,899  |   |  |  | 28,689  |  
|Labor obligations                             |  |                | 3,964   |   |               |  | 8,730   |      |  |  | 8,752   |   |  |      | 7,436   |   |      |  | 4,801   |   |  |  | 4,143   |  
|Taxes payable                                 |  |                | 2,952   |   |               |  | 6,501   |      |  |  | 2,306   |   |  |      | 3,102   |   |      |  | 767     |   |  |  | 614     |  
|Dividends payable                             |  |                | 11      |   |               |  | 25      |      |  |  | 1,963   |   |  |      | 2       |   |      |  | 2       |   |  |  | 2       |  
|Derivative financial instruments              |  |                | 93      |   |               |  | 204     |      |  |  | 2,860   |   |  |      | 8,307   |   |      |  | 2,918   |   |  |  | 60      |  
|Payable for purchase of farms                 |  |                | 20,350  |   |               |  | 44,820  |      |  |  | 43,650  |   |  |      | 40,858  |   |      |  | 57,521  |   |  |  | 61,420  |  
|Transactions with related parties             |  |                | 15,091  |   |               |  | 33,237  |      |  |  | 183     |   |  |      |        |   |      |  |        |   |  |  |        |  
|Onerous contract                              |  |                | 263     |   |               |  | 579     |      |  |  |        |   |  |      |        |   |      |  |        |   |  |  |        |  
|Advances from customers                       |  |                | 6,828   |   |               |  | 15,038  |      |  |  | 2,124   |   |  |      | 4,490   |   |      |  | 5,909   |   |  |  | 178     |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Total current liabilities                     |  |                | 81,521  |   |               |  | 179,545 |      |  |  | 114,544 |   |  |      | 111,413 |   |      |  | 112,252 |   |  |  | 96,909  |  
|Non-current liabilities                       |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Loans and financings                          |  |                | 26,292  |   |               |  | 57,909  |      |  |  | 56,924  |   |  |      | 51,294  |   |      |  | 55,436  |   |  |  | 49,299  |  
|Taxes payable                                 |  |                | 1,127   |   |               |  | 2,482   |      |  |  | 5,812   |   |  |      | 2,695   |   |      |  | 1,594   |   |  |  | 2,203   |  
|Deferred taxes                                |  |                |        |   |               |  |        |      |  |  |        |   |  |      |        |   |      |  | 1,594   |   |  |  |        |  
|Derivative financial instruments              |  |                |        |   |               |  |        |      |  |  | 1,140   |   |  |      | 10,209  |   |      |  |        |   |  |  |        |  
|Provision for legal claims                    |  |                | 1,622   |   |               |  | 3,573   |      |  |  | 4,802   |   |  |      | 1,183   |   |      |  |        |   |  |  |        |  
|Other liabilities                             |  |                | 439     |   |               |  | 967     |      |  |  | 623     |   |  |      |        |   |      |  | 492     |   |  |  | 782     |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Total non-current liabilities                 |  |                | 29,480  |   |               |  | 64,931  |      |  |  | 69,301  |   |  |      | 65,381  |   |      |  | 59,116  |   |  |  | 52,284  |  
|Equity                                        |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Attributable to equity holders of the parent: |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Capital                                       |  |                | 265,255 |   |               |  | 584,224 |      |  |  | 584,224 |   |  |      | 584,224 |   |      |  | 584,224 |   |  |  | 584,224 |  
|Capital reserves                              |  |                | 1,907   |   |               |  | 4,201   |      |  |  | 3,385   |   |  |      | 2,134   |   |      |  | 996     |   |  |  |        |  
|Income reserves                               |  |                |        |   |               |  |        |      |  |  | 6,296   |   |  |      |        |   |      |  |        |   |  |  |        |  
|Treasury shares                               |  |                | (878    | ) |               |  | (1,934  | )    |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Other reserves                                |  |                | 3,815   |   |               |  | 8,403   |      |  |  | (6,920  | ) |  |      | (6,920  | ) |      |  |        |   |  |  |        |  
|Accumulated losses                            |  |                | (4,989  | ) |               |  | (10,988 | )    |  |  |        |   |  |      | (20,470 | ) |      |  | (14,898 | ) |  |  | (29,641 | )
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|                                              |  |                | 265,110 |   |               |  | 583,906 |      |  |  | 586,985 |   |  |      | 558,968 |   |      |  | 570,322 |   |  |  | 554,583 |  
|Non-controlling interests                     |  |                |        |   |               |  |         |      |  |  |        |   |  |      |        |   |      |  | 6,601   |   |  |  | 6,245   |  
|                                              |  |                | 265,110 |   |               |  | 583,906 |      |  |  | 586,985 |   |  |      | 558,968 |   |      |  | 576,923 |   |  |  | 560,828 |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  
|Total liabilities and equity                  |  |                | 376,111 |   |               |  | 828,82  |      |  |  | 770,830 |   |  |      | 735,762 |   |      |  | 748,291 |   |  |  | 710,021 |  
|                                              |  |                |         |   |               |  |         |      |  |  |         |   |  |      |         |   |      |  |         |   |  |  |         |  



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##### Table of Contents

We have included information with respect to dividends and/or interest on shareholders
equity paid to holders of our common shares and preferred shares since June 30, 2010 in Reais and in U.S. dollars translated from Reais at the commercial market selling rate in effect as of the payment date under the caption Item
8Financial InformationDividends and Dividend PolicyRecent Dividend Payments.

Exchange Rates

Our dividends, when paid in cash, are denominated in Reais. As a result, exchange rate fluctuations have affected and will affect the U.S.
dollar amounts received by holders of ADSs on conversion of such dividends by The Bank of New York, as the ADS depositary. The Bank of New York converts dividends it receives in foreign currency into U.S. dollars upon receipt, by sale or such other
manner as it has determined and distributes such U.S. dollars to holders of ADSs, net of The Bank of New Yorks expenses of conversion, any applicable taxes and other governmental charges. Exchange rate fluctuations may also affect the U.S.
dollar price of the ADSs.

The Brazilian government may impose temporary restrictions on the conversion of Reais into
foreign currencies and on the remittance to foreign investors of proceeds from their investments in Brazil. Brazilian law permits the government to impose these restrictions whenever it determines there is an imbalance in Brazils balance of
payments or reason to expect that one will occur.

The following tables show, for the periods and dates indicated, certain
information regarding the Real/U.S. dollar exchange rate. On June 30, 2014, the Real/U.S. dollar exchange rate was R$2.2025 per US$1.00. On October 27, 2014, the Real/U.S. dollar exchange rate was R$2.5335 per US$1.00.
The information below is based on the noon buying rate in the City of New York for wire transfers in Brazilian Reais as certified for U.S. customs purposes by the Federal Reserve Bank of New York.



|                           |  |                  |       | 
|-------------------------- |  | ---------------- | ----- | 
|Fiscal year ended June 30, |  | Average Rate(1)  |      
|                           |  | (R$ per US$1.00) |      
|2010                       |  |                  | 1.759 | 
|2011                       |  |                  | 1.677 | 
|2012                       |  |                  | 1.792 | 
|2013                       |  |                  | 2.038 | 
|2014                       |  |                  | 2.297 | 



|(1) | The average rate is calculated as the average of the noon buying rates on the last day of each month during the period.
|--- | -----------------------------------------------------------------------------------------------------------------------



|                                        |  |                  |        |  |     |  |       | 
|--------------------------------------- |  | ---------------- | ------ |  | --- |  | ----- | 
|Period                                  |  | High             |        |  | Low | 
|                                        |  | (R$ per US$1.00) |       
|April 2014                              |  |                  | 2.279  |  |     |  | 2.187 | 
|May 2014                                |  |                  | 2.244  |  |     |  | 2.202 | 
|June 2014                               |  |                  | 2.281  |  |     |  | 2.194 | 
|July 2014                               |  |                  | 2.264  |  |     |  | 2.202 | 
|August 2014                             |  |                  | 2.295  |  |     |  | 2.236 | 
|September 2014                          |  |                  | 2.452  |  |     |  | 2.231 | 
|October 2014 (through October 27, 2014) |  |                  | 2.5335 |  |     |  | 2.377 | 

B.Capitalization and Indebtedness

Not applicable.

C.Reasons for the offer
and use of proceeds

Not applicable.



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D.Risk Factors

Risks Relating to our Business and Industry

Our
ability to implement our business strategy successfully may be adversely affected by numerous factors beyond our control, which may materially and adversely affect our business, financial condition, and results of operations.

Our business strategy depends on our ability to acquire, develop, operate and sell our agricultural properties on a profitable basis. Our
strategy is premised on our ability to acquire agricultural properties at attractive prices, develop them into efficient and profitable operations and sell them at a profit in the medium and long term. These factors are essential for our prospects
of success, but are subject to significant uncertainties, contingencies and risks within our economic, competitive, regulatory and operational environment, many of which are beyond our control. Our ability to execute our business strategy
successfully is uncertain and may be adversely affected by any one or more of the following:



| |  |  | failure to acquire and sell agricultural properties at attractive prices;
| | - |  | -------------------------------------------------------------------------



| |  |  | changes in market conditions or our failure to anticipate and adapt to new trends in Brazils rapidly evolving agricultural real estate sector;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | inability to overcome certain limitations on the acquisition of land in Brazil by foreigners, as provided in an opinion of the Attorney General of the federal government;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | failure to expand our operations within the originally proposed time frame;
| | - |  | ---------------------------------------------------------------------------



| |  |  | failure to maintain the fiscal structure of our subsidiaries;
| | - |  | -------------------------------------------------------------



| |  |  | inability to develop infrastructure and attract personnel in a timely and effective manner;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | inability to identify service providers for our agricultural properties and projects;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | increased competition for suitable land from other agricultural real estate owners or developers which increases our costs and adversely affects our margins;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | inability to develop and operate our agricultural properties profitably that may result from inaccurate estimates regarding the cost of infrastructure, other investments or operating costs;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | failure, delays or difficulties in obtaining necessary environmental and regulatory permits;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | the failure of purchasers of our properties to comply with their payment obligations to us;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | increased operating costs, including the need for improvements to fixed assets, insurance premiums and property and utility taxes and fees that affect our profit margins;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | global climate conditions, such as global warming, which may contribute to the frequency of unpredictable and previously rare meteorological phenomena such as hurricanes and typhoons, as well as unpredictable and
unusual patterns of rainfall, among others;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | unfavorable climate conditions in Brazil, particularly in the regions where we carry out our activities;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | the economic, political and business environment in Brazil, and specifically in the geographical regions where we invest;
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | inflation, fluctuating interest rates and exchange rates;
| | - |  | ---------------------------------------------------------



| |  |  | disputes and litigation relating to our agricultural properties; and
| | - |  | --------------------------------------------------------------------



| |  |  | labor, environmental, civil and pension liabilities.
| | - |  | ----------------------------------------------------



7



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We may not be able to continue acquiring suitable agricultural properties on attractive terms.

In recent years, investments in Brazils agriculture sector have increased substantially. As a result, demand and valuations for the kind
of properties we seek to acquire have escalated significantly. We believe that prices for such properties are likely to continue to increase, perhaps significantly as demand is expected to remain high. We compete with local and foreign investors,
many of whom are larger and have greater financial resources than we do. Such investors may be able to incur operating losses for a sustained period, retain their real estate investments for a longer period than we can or accept lower returns on
such investments. As a result, such investors may be willing to pay substantially higher prices for agricultural properties than we are able or willing to do, depriving us of opportunities to acquire the best agricultural properties and/or
increasing our acquisition costs. As a result of the foregoing, we cannot assure you that we will be able to locate and acquire suitable investments on reasonable terms, and our inability to do so would have a material adverse effect on us.

The imposition of restrictions on acquisitions of agricultural properties by non-Brazilian nationals may materially restrict the development of our
business.

In August 2010, the president of Brazil approved the opinion of the Attorney General of the federal government
affirming the constitutionality of Brazilian Law No. 5,709/71, which imposes important limitations on the acquisition and lease of land in Brazil by foreigners and by Brazilian companies controlled by foreigners. Under this legislation,
companies that are majority-owned by foreigners may not acquire agricultural properties in excess of 100 indefinite exploration modules, or MEI (which are measurement units adopted by the National Institute of Agrarian Development (Instituto
Nacional de Colonização e Reforma Agrária) or INCRA, within different Brazilian regions, and which range from five to 100 hectares) absent the prior approval of the Brazilian Congress, while the acquisition of areas
measuring less than 100 MEIs by such companies requires the prior approval of INCRA. In addition, agricultural areas that are owned by foreigners or companies controlled by foreigners may not exceed 25% of the surface area of the relevant
municipality, of which area up to 40% may not belong to foreigners or companies controlled by foreigners of the same nationality, meaning that the sum of agricultural areas that belong to foreigners or companies controlled by foreigners of the same
nationality may not exceed 10% of the surface area of the relevant municipality. In addition, INCRA will also verify if the agricultural, cattle-raising, industrial or colonization projects to be developed in such areas were previously approved by
the relevant authorities. After that analysis INCRA will issue a certificate allowing the acquisition or lease of the property. The purchase and/or lease of agricultural properties that do not respect the requirements above need to be authorized by
the Brazilian Congress. In both cases, it is not possible to determine an estimated time frame for the approval procedure, since at the date of this annual report, there are no known cases of certificates having been granted.

At September 30, 2014, approximately 77% of our common shares were held by foreigners and, accordingly, the implementation of Law
No. 5,709/71 may impose on us additional procedures and approvals in connection with our future acquisitions of land, which may result in material delays and/or our inability to obtain needed approvals, except in the State of São Paulo,
where the entities providing notary and registrary services are, at the date hereof, exempt from observing certain restrictions and requirements imposed by Law no 5.709/71 and Decree no 74.965/74. There is a judgement pending on the Supreme Court
(Supremo Tribunal Federal  STF) regarding this exemption. In addition, we may need to modify our business strategy and intended practices in order to be able to acquire agricultural properties. For example, we currently have control over the
properties we own, and we would need to acquire properties in partnership with local companies in which we relinquish our right to exercise control over the entities acquiring such properties. This might have the effect of increasing the number of
transactions we must complete, which would add transaction costs. It might also require the execution of joint ventures or shareholder agreements, which increases the complexity and risk associated with such transactions. Any regulatory limitations
and restrictions could materially limit our ability to acquire agricultural properties, increase the investments, transaction costs or complexity of such transactions, or complicate the regulatory procedures required, any of which could materially
and adversely affect us and our ability to successfully implement our business strategy.

A substantial portion of our assets consist of
agricultural properties which are illiquid.

Our business strategy is premised on the appreciation of the capital invested in our
agricultural properties and the liquidity of those investments. We cannot assure you that the value of our agricultural properties will increase in the short-, medium- or long-term or that we will be able to monetize our agricultural investments
successfully. Agricultural real estate assets are generally illiquid and have volatile values, and agricultural properties in Brazil are especially illiquid and volatile. As a result, it may be difficult for us to promptly adjust our portfolio of
properties in response to changes in economic or business conditions, and we may be unable to find purchasers willing to acquire our agricultural properties at prices favorable to us. Lack of liquidity and volatility in local market conditions would
adversely affect our ability to execute property dispositions on a timely and profitable basis which would have a material adverse effect on us.



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We may not be profitable or our cash flow may not be positive for a number of years.

We expect to incur significant capital and operating expenses for several years on account of our continuing development activities. Due to the
capital intensive and long-term nature of our real estate development activities, many of our properties will not generate immediate cash flows or provide a short-term return on investment. Therefore, we may not achieve positive cash flows or
profitability for a number of years, and even if we do, we cannot assure you that such positive cash flows or profitability will be sustained in the future. Should we fail to achieve and sustain profitability, our business, financial condition, and
results of operations and the market value of our common shares would be adversely affected.

Fluctuation in market prices for our agricultural
products could adversely affect us.

We are not able to obtain hedging protection or minimum price guarantees for the entirety of
our production and therefore we are exposed to significant risks associated with the level and volatility of crop prices. The prices we are able to obtain for our agricultural products from time to time will depend on many factors beyond our
control, including:



| |  |  | global commodity prices, which historically have been subject to significant fluctuations over relatively short periods of time, depending on worldwide supply and demand as well as speculation;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | weather conditions, or natural disasters in areas where agricultural products are cultivated;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | worldwide inventory levels (i.e., supply or stock of commodities carried over from year to year);
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | the business strategies adopted by other major companies operating in the agricultural and agribusiness sectors;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | changes in agriculture subsidies with regard to certain important producers (mainly in the United States and the European Economic Community), trade barriers with regard to certain important consumer markets and the
adoption of other government policies affecting market conditions and prices;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | available transportation methods and infrastructure development in the regions where we operate or in remote areas serving local markets and which affect the local prices of our crops;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | cost of raw materials; and
| | - |  | --------------------------



| |  |  | supply of and demand for competing commodities and substitutes.
| | - |  | ---------------------------------------------------------------

In addition, we believe there
is a close relationship between the value of our agricultural properties and market prices of the commodities we produce which are affected by global economic and other conditions. A decline in the prices of grains, sugar or related by-products
below their current levels for a sustained period would significantly reduce the value of our land holdings and materially and adversely affect our business, financial condition, and results of operations.

We are dependent on third-party service providers.

In addition to our own personnel, we are highly dependent on third-party contractors to develop and cultivate our agricultural properties, and
to provide the machinery and equipment needed for such purpose. As a result, our future success depends on the skill, experience, knowledge and efforts of our third-party service providers. We cannot assure you that we will be able to hire the
desired third-party service providers for our agricultural properties or that such providers will have the ability to ensure quality agricultural production in an efficient manner, and at competitive prices. Our failure to hire the desired service
providers for our agricultural properties, or the failure of our providers to provide quality services, or the revocation or termination or our failure to renew our service contracts or negotiate new contracts with other service providers at
comparable prices and terms, would adversely affect us.

Our dependence on third-party contractors also subjects us to the risk of labor
lawsuits alleging that an employment relationship exists between us and our contractors personnel, and that as a result we have joint and several or secondary liability for our contractors labor and social security payment obligations,
lease payments or other obligations. Such lawsuits could be brought independently by such third-party employees, or could arise as a result of inspections by governmental authorities. The Brazilian Supreme Labor Court (Tribunal Superior do Trabalho)
has held that outsourcing is legally permissible with respect to specialized services not related to the outsourcing companys core business, such that an employment relationship is not formed between the outsourcer and the workers providing
the non-core services. In addition, pursuant to the courts decision, companies hiring third-party contractors in violation of such standard will be held secondarily liable for labor and social security contingent liabilities of the employees
of such third-party contractors. If we are forced to recognize an employment relationship between us and the employees of our third-party service providers, we may be required to change our strategy with regard to the use of third-party service
providers, which could have an adverse effect on our business, financial condition, and results of operations.



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Moreover, pursuant to Brazilian environmental law we are jointly and severally liable, together
with our contractors, for all environmental damages caused by our third-party contractors, irrespective of our fault for such damages. Such obligations or our costs for defending against any such allegations are potentially significant and could
have a material adverse effect on us if we were deemed responsible for their payment.

Changes in government policies may adversely affect our
business, financial condition, and results of operations.

Government policies for encouraging biofuels as a response to
environmental concerns have shown, and are likely to continue to show an impact on grain prices. The nature and scope of future legislation and regulations affecting our markets are unpredictable, and we cannot assure you that current concessions,
prices or market protections involving biofuels will be maintained in their current form for any finite period. Any reduction in the support for biofuels on the part of the United States government or any other government may result in stagnation or
decline in the market prices of certain agricultural commodities, and consequently on the price of our agricultural properties, which may adversely affect our business, financial condition, and results of operations.

We are subject to extensive environmental regulation.

Our business activities in Brazil are subject to extensive federal, state and municipal laws and regulations concerning environmental
protection, which impose on us various environmental obligations, such as environmental licensing requirements, minimum standards for the release of effluents, use of agrochemicals, management of solid waste, protection of certain areas (legal
reserve and permanent preservation areas), and the need for a special authorization to use water, among others. The failure to comply with such laws and regulations may subject the violator to administrative fines, mandatory interruption of
activities and criminal sanctions, in addition to the obligation to cure and pay environmental and third-party damage compensation, without any caps. In addition, Brazilian environmental law adopts a joint and several and strict liability system for
environmental damages, which makes the polluter liable even in cases where it is not negligent and would make us jointly and severally liable for the obligations of our producers or off-takers. If we become subject to environmental liabilities, any
costs we may incur to rectify possible environmental damage would lead to a reduction in the financial resources which would otherwise remain at our disposal for current or future strategic investment, thus causing an adverse impact on us.

As environmental laws and their enforcement become increasingly stringent, our expenses for complying with environmental requirements are
likely to increase in the future. Furthermore, the possible implementation of new regulations, changes in existing regulations or the adoption of other measures could cause the amount and frequency of our expenditures on environmental preservation
to vary significantly compared to present estimates or historical costs. Any unplanned future expenses could force us to reduce or forego strategic investments and as a result could materially and adversely affect us.

If we fail to innovate and utilize modern agricultural technologies and techniques to enhance production and yields of our acquired agricultural
properties, we may be adversely affected.

Our business model is focused on our acquiring underdeveloped or underutilized
agricultural properties and improving them by applying evolving agricultural technologies and techniques. Therefore, our strategy depends to a large extent on our ability to obtain and apply modern agricultural techniques and technologies to enhance
the value of the properties we acquire. If we are unable to apply in a timely manner the most advanced technologies and farming techniques required to add value to our agricultural properties and make our products competitive and attractive to local
and international investors, we would be adversely affected.

We may experience difficulties implementing our investment projects, which may affect
our growth.

Part of our strategy with regard to our agricultural properties consists of investing in support infrastructure in
order to increase the value of such agricultural properties. In implementing our investment projects, we may face a number of challenges, including: (i) failures or delays in acquiring necessary equipment or services: (ii) higher costs
than those originally estimated; (iii) difficulties securing the necessary environmental and government licenses; (iv) changes in market conditions, which could render the projects less profitable than originally estimated;
(v) impossibility or delays in acquiring land at attractive prices, or an increase in the land prices on account of growing demand for land by our competitors; (vi) impossibility of, and delay in identifying and acquiring land that is in
compliance with Brazilian real estate property laws; (vii) lack of capacity to develop infrastructure and attract qualified labor on a timely and efficient basis; (viii) disputes and litigation relating to the land we acquire;
(ix) cultural challenges deriving from the integration of new management and employees in our organization; and (x) the need to update accounting systems, administrative data and human resources. Our inability to manage these risks would
adversely affect us.



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Property values in Brazil could decline significantly.

Property values in Brazil are influenced by a wide variety of factors beyond our control, and therefore we cannot assure you that property
values will continue to increase or that property values will not decline. A significant decline in property values in Brazil would adversely affect us.

Our growth depends on our ability to attract and retain qualified personnel.

We are highly dependent on the services of our technical and administrative staff. If we lose any of our senior management, or require
additional management personnel, we will have to attract similarly qualified administrative and technical personnel. There is significant demand for high-level, technical personnel with the skills and know-how required to operate our business, and
we compete for this talent in the context of a global market. The availability of attractive opportunities in Brazil and other countries may adversely affect our ability to hire or retain highly-qualified personnel. If we fail to attract and retain
the professionals we need to expand and manage our operations, we may not be able to manage our business effectively and we may be materially and adversely affected.

Unpredictable weather conditions may have an adverse impact on our agricultural properties and products.

The occurrence of severe weather conditions, including droughts, floods, heavy rainfall, hail, frost or extremely high temperatures is
unpredictable and has had and could have in the future a potentially devastating impact on our agricultural properties or production. Adverse weather conditions may be exacerbated by the effects of climate change. In recent years, different regions
in Brazil have been affected by extreme weather conditions, and the regions where our properties are located have also experienced high temperatures and severe drought in recent years. The effect of severe weather conditions may materially reduce
the productivity of our farms, impairing our revenue and cash flow, and requiring higher levels of investment or significant increases in our operating costs, any of which could have a material and adverse impact on us.

Diseases may affect our crops, potentially destroying all or part of our production.

The occurrence and effect of diseases can be unpredictable and devastating on crops, potentially rendering useless all or a significant
portion of the affected crops. The cost of preventing and treating crop disease tends to be high. For example, the spread of Asian soybean rust (ferrugem asiática), has resulted in lower crop yields and higher operating costs.
Currently, Asian soybean rust can only be controlled, not eliminated. The origination and spread of diseases may occur for many reasons beyond our control, including the failure of other agricultural producers to comply with applicable health and
environmental regulations. The appearance of new diseases or the mutation or proliferation of existing diseases could damage or completely destroy our crops which would materially and adversely affect us.

Fires and other accidents may affect our agricultural properties and adversely affect us.

Our operations are subject to various risks affecting our agricultural properties and agricultural installations, including destruction of
farms and crops by fire and other natural disasters or events, and theft or other unexpected loss of grains or fertilizers and supplies. We could be materially and adversely affected if any of these risks were to occur.

Widespread uncertainties and fraud involving ownership of real estate in Brazil may adversely affect us.

Under Brazilian law, ownership of real estate is conveyed only through registration of deeds at the applicable land registry. Land registry
recording errors, including duplicate or fraudulent entries, and legal challenges to deeds occur frequently. Real estate title litigation is prevalent in Brazil, and as a result there is a risk that such errors, fraud or challenges could adversely
affect us, causing the loss of all or substantially all our agricultural properties.

We depend on international trade, and economic and other
conditions in our key export markets.

Brazils current agricultural production capacity is greater than the consumption
requirement of its domestic agricultural market. Agriculture exports account for an increasingly significant portion of our revenue, especially as our rehabilitated farm properties gain crop production capabilities and increased yield. As a result,
our results of operations will increasingly depend on political, economic and regulatory conditions in our principal export markets. The ability of our products to compete effectively in these export markets may be adversely affected by a number of
factors beyond our control including the deterioration of macroeconomic conditions, the volatility of exchange rates, the imposition of tariffs or other trade barriers or other factors in those markets such as regulations relating to the chemical
content of agricultural products and safety and health regulations.



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Due to the growing market share of Brazilian agricultural and beef products in the international
markets, Brazilian exporters are increasingly being affected by tariffs and other barriers imposed by importing countries to, among other things, protect local producers, limiting access of Brazilian companies to their markets. For example, the
European Union currently charges protective tariffs designed to mitigate the effects of Brazils lower production costs on local European producers. Developed countries also sometimes use direct and indirect subsidies to enhance the
competitiveness of their producers in other markets. The adoption of measures by a given country or region, such as restrictions, import quotas or suspension of imports could substantially affect the export volume of agricultural products and,
consequently, our volume of exports and results of operations. If the competitiveness of our products in one or more of our significant markets were to be affected by any one of these events, we may not be able to reallocate our products to other
markets on comparable terms, and we could be adversely affected.

Fluctuations in the value of the Real in relation to the U.S. dollar could
adversely affect us.

Foreign exchange fluctuations, particularly of the Brazilian Real against the U.S. dollar, may
significantly affect our results of operations given that: (1) our products and the basic supplies used in our production are traded internationally; (2) soybean prices are defined based on prices prevalent on the Chicago Board of Trade,
or CBOT; and (3) most markets are served by several suppliers from different countries and competitiveness of farm products abroad may increase in relation to ours in light of the appreciation of the Brazilian currency in relation to the U.S.
dollar. Fluctuations in the value of the Real in relation to the U.S. dollar could impact our export revenue, our sales in U.S. dollars in the Brazilian market and our financial expenses and operating costs, which may adversely affect us.

We also hold derivative financial instruments to hedge risks relating to foreign currencies on our revenue from exports and operating
costs. If we fail to manage these instruments properly, we may be adversely affected by our exposure to these risks, which may have a material adverse effect on us.

Our business is seasonal, and our revenue may fluctuate significantly depending on the growing cycle of our crops.

Agribusiness operations are predominantly seasonal in nature. In Brazil the harvest of soybean, corn and rice generally occurs from February to
June. The annual sugarcane harvesting period in Brazil begins in January and ends in December. As a result, our results of operations are likely to continue to fluctuate significantly between the planting and harvesting periods of each crop which
cause fluctuations in our cash flows as a result of disparities between our revenue stream and our fixed expenses. In addition, seasonality creates limited windows of opportunity for our producers to complete required tasks at each stage of crop
cultivation. Should events such as adverse weather conditions (including deluges of rain as has recently been the case throughout Brazil) or transportation interruptions occur during these seasonal windows, we may be faced with the possibility of
reduced revenue without an opportunity to recover until the following crops planting. Finally, because of the effects of seasonality, our quarterly results may not be indicative of our annual result.

Our growth will require additional capital which may not be available or may not be available on terms and conditions acceptable to us.

Our operations require a significant amount of capital. We may need to seek additional capital by issuing shares or debt securities, or by
incurring indebtedness. Our ability to raise capital will depend on our future profitability, which is currently uncertain, and on political and economic conditions in Brazil and the international agricultural and real estate markets. Depending on
these and other factors, many of which are beyond our control, additional capital may not be available or, if available, may not be available on conditions that are favorable or acceptable to us. If we are required to finance our activities through
indebtedness, it is likely that the terms of that debt will impose upon us obligations or covenants, financial or otherwise, that could restrict our operational flexibility. Should we fail to raise additional capital under conditions that are
acceptable to us, we could be adversely affected.

We plan to continue to use financial derivative instruments which may cause substantial losses.

We plan to continue to use derivative financial instruments, principally commodity hedge derivatives, foreign exchange derivatives
and exchange rate swaps. If we enter into such hedging agreements and future prices of the underlying commodities differ from our expectations, we may incur substantial losses which could have an adverse effect on us.

Furthermore, our hedging strategies may not properly take account of the effects of foreign exchange or commodity variations on our financial
position. On entering into forward exchange and commodity agreements, we will be subject to the risk that our counterparties could fail to fulfill the conditions of the respective agreement. We may not be able to receive compensation for losses and
damages from any defaulting counterparty through legal remedies, on account of laws protecting against bankruptcy or other similar protections for insolvent debtors, foreign laws restricting cross-border legal remedies, or for other reasons, which
may adversely affect our business, financial condition, and results of operations.



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We may not be successful in our future partnerships and strategic relationships.

We may enter into strategic partnerships and alliances in order to benefit from certain business opportunities. We cannot predict if and when
such strategic partnerships and alliances will occur. Our ability to expand our business successfully through strategic partnerships and alliances depends on various factors, including our ability to negotiate favorable conditions for such
partnerships and alliances, in addition to factors beyond our control, such as our partners compliance with obligations arising from the partnership. Furthermore, our expectations regarding the benefits of these partnerships may not
materialize. If we are unable to develop successful strategic partnerships and alliances we could be adversely affected.

Cresud, our controlling
shareholder, and certain members of our board of directors may have interests that differ from those of our other shareholders.

As
of September 30, 2014, Cresud holds 39.64% of our common shares. Cresud has numerous other investments and may have other priorities that may conflict with those of our other shareholders, and as a result significant conflicts of interest may
arise between Cresud and our other shareholders. In addition, five of our nine directors have been nominated by Cresud and therefore are affiliated with such company. In addition, certain members of our management, including our chief administrative
officer and our agricultural technical officer, were previously employed by, and as of the date of this Annual Report are no longer employed by, Cresud. This situation may give rise to real or apparent conflicts of interest as such directors and
officers may have fiduciary duties or other interests owed to both us and Cresud or any of its affiliates. It may also limit the ability of such directors and officers to participate in certain matters. It is impossible to predict whether the
outcome of decisions by the members of the board will be favorable to us or to our other shareholders.

In addition, as a result of
Cresuds ownership interest in us, conflicts of interest could arise with respect to transactions involving our ongoing business activities, and the resolution of these conflicts may not be favorable to us. Specifically, business opportunities,
including but not limited to potential targets for rural property acquisitions may be attractive to both Cresud and us. We may not be able to resolve any potential conflicts and, even if we do so, the resolution may be less favorable to us than if
we were dealing with an unaffiliated party.

Substantially all of our revenue is derived from a small number of clients.

We currently sell a substantial portion of our total crop production to a small number of clients who have substantial bargaining power. For
instance, during the year ended June 30, 2014, our three largest customers accounted for 83% of our total revenue. Furthermore, we have entered into a supply contract with ETH Bioenergia S.A., (previously Brenco and hereinafter ETH Bioenergia),
pursuant to which we currently supply 100% of our sugarcane production from our Alto Taquari and Araucaria farms to ETH Bioenergia. The term of this supply contract covers two full crop cycles, which consists of six crop years and five harvests, and
therefore is scheduled to expire in crop year 2021/2022. As a result, the strong competition between a relatively fragmented sector of agricultural producers in the internal and external markets further increases the bargaining power of our highly
concentrated client base. Thus, we may not be able to maintain or form new relationships with customers, which could have a material adverse effect on us.

Concentration among our client base also increases the consequences that would result should we lose any of our clients or if any of our
clients default on their obligations to us, either in the form of non-payment or through a breach of any contractual provision or obligation, such as failure to ship a product purchased or delays in shipment. Noncompliance with the time of shipment
of our products could directly affect the planning of our harvest, which could generate losses and result in additional costs.

Increases in the
price of raw materials and oil may adversely affect us.

Our agricultural properties are located in Brazils savannah region
where the soil is generally acidic and not very fertile, requiring the use of lime and fertilizers. Our operations require other raw materials such as pesticides and seeds which we acquire from local and international suppliers. We do not have
long-term supply contracts for these raw materials and therefore are exposed to the risk of cost increases. A significant increase in the price of lime, fertilizers or other raw materials we use would likely reduce our profitability or otherwise
adversely affect our business operations as these are not costs that can readily be passed on to our customers. In addition, certain of our production costs, including fertilizers and the cost of leasing agricultural machinery, are linked to the
international price of oil and its derivatives. Therefore, if the price of oil increases significantly, we could be adversely affected.



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Delays or failures in the delivery of raw materials used by us and our suppliers could have an adverse
effect on us.

We depend on suppliers to provide us with fertilizers, seeds, other raw materials and machinery services. Possible
delays in the delivery of such items may delay our planting efforts until we are able to establish agreements with other suppliers, or may delay our harvest in the case of the delay in delivery of machinery. Accordingly, any delays, failures or
defects in the delivery of raw materials or inputs or with regard to the provision of services to us by our suppliers could adversely affect our business and our results of operations.

Some of our agricultural products contain genetically modified organisms (GMOs), and risks associated with GMOs remain uncertain.

Approximately 65% of our products, including soybean and corn, contain genetically modified organisms, or GMOs, in varying proportions,
depending on the crop year. Production and consumption of GMOs remain controversial, and adverse publicity and consumer resistance has led to adoption of certain governmental regulations limiting sales of GMO products in important markets including
the European Union. If GMOs were determined to present risks to human health or to the environment, demand for our GMO products could collapse, and we could face potentially significant liability for harm caused by such products, all of which could
materially and adversely affect our business, financial condition, and results of operations.

Lack of transportation, storage and processing
infrastructure in Brazil represents an important challenge for the Brazilian agricultural and agricultural real estate sectors.

We
depend on efficient access to transportation and port infrastructure for the growth of Brazilian agriculture in general, and our operations in particular. We may decide to acquire agricultural properties in areas where existing transportation
infrastructure is inadequate and where improvements may be required to make our agricultural production more accessible to export centers at competitive prices. A substantial portion of Brazilian agricultural production is currently transported by
trucks, which is significantly more expensive than transportation by rail cars. Given that our dependence on road transportation prevents us from being considered a low-cost producer, our ability to compete on the world market may be impaired,
especially as the price of fuel increases. As a result, we may not be able to secure efficient transportation for our production to reach major markets in a cost-efficient manner or at all, which may adversely affect our business, financial
condition, and results of operations.

Competition in the markets for our products may affect us.

We face significant domestic and international competition in each of our markets and in many of our production lines. The global market for
agricultural products is highly competitive and sensitive to changes in industrial capacity, product inventories and cyclical changes in the world economy, any one or more of which may affect to a significant degree the selling price of our products
and therefore our profitability. Since many of our products are agricultural commodities, such products compete in international markets almost exclusively based on price. Many other producers of such commodities are larger than us and possess
greater financial and other resources. Furthermore, many other producers receive subsidies in their respective countries that generally are not available in Brazil. Such subsidies may afford producers lower production costs or enable them to operate
in an environment with sharp price reductions, constrained margins and operating losses for longer periods. Any increased competitive pressure with respect to our products could materially and adversely affect our business, financial condition, and
results of operations.

Social movements may affect the use of our agricultural properties or cause damage to them.

Social movements such as the Landless Rural Workers Movement (Movimento dos Trabalhadores Rurais Sem Terra) and the
Pastoral Land Commission (Comissão Pastoral da Terra) are active in Brazil and advocate land reform and property redistribution by the Brazilian government. Invasion and occupation of agricultural land by large numbers of people is a
common practice among the members of such movements, and in certain regions, including those where we currently invest, remedies such as police protection or eviction procedures are inadequate or non-existent. As a result, we cannot assure you that
our agricultural properties will not be subject to invasion or occupation by any social movement. Any invasion or occupation may materially impair the use of our lands and adversely affect our business, financial condition, and results of
operations.



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We made investments in farmland in Paraguay, and we may possibly make investments in other countries in and
outside Latin America, in which case we would be subject to the associated economic, legal, political and regulatory risks.

Currently, we conduct our activities in Brazil and Paraguay. Nevertheless, we are in the process of considering our expansion into other
countries in and outside Latin America, although we currently have no definitive commitments or specific plans with respect thereto. Accordingly, in the future we may expand our activities into other countries in Latin America or elsewhere if we
decide that international expansion would be appropriate to achieve our objectives. The success in other countries of the business strategy and business model that we apply in Brazil would be subject to a high level of uncertainty and depend on
numerous factors beyond our control; and therefore we cannot assure you that any such expansion would be profitable or enable us to obtain the expected returns on our investments, or even recuperate our investments. Any international expansion of
our activities would be subject to political, economic and regulatory risks in the relevant country and to risks inherent to the management of a transnational company including:



| |  |  | challenges caused by distance, language, local business practices and local cultural differences (i.e. lack of financing; longer payment cycles in the target country; difficulties in forming partnerships or strategic
alliances with local parties; conflicting or redundant practices in respect to tax, regulatory, legal and administrative aspects);
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | negative effects of currency fluctuations or the imposition of exchange controls or restrictions on repatriation of capital;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse changes in laws and local policies, particularly those relating to import tariffs, labor practices, environment, investment, acquisition of agricultural property by foreign companies or companies controlled by
foreigners;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | difficulty of enforcement of contracts and collection or enforcing of debts, or difficulties or restrictions imposed by local courts;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | expropriation of private domain, imposition of legal or administrative limitations to the exercise of the property right as a result of changes in laws or applicable regulations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | difficulty in obtaining licenses, permits or other approvals from local government authorities;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | political disputes, social unrest and deteriorating local economic conditions;
| | - |  | ------------------------------------------------------------------------------



| |  |  | transnational conflicts or disputes involving Brazil and the target country;
| | - |  | ----------------------------------------------------------------------------



| |  |  | terrorism or military conflicts; and
| | - |  | ------------------------------------



| |  |  | natural disasters, epidemics, riots and insurrections.
| | - |  | ------------------------------------------------------

Our inability to recognize and respond
to these differences, challenges and risks could adversely affect any operations we may undertake in markets outside of Brazil, which could cause a material adverse effect on our business, financial condition, and results of operations.

Risks Relating to Brazil

The Brazilian government
has exercised, and continues to exercise, significant influence over the Brazilian economy, which, combined with Brazilian political and economic conditions, may adversely affect us.

Historically, the Brazilian government frequently has intervened in the Brazilian economy and occasionally has made significant changes in
economic policy and regulation. The Brazilian government has taken various measures to control inflation and to implement political and regulatory policy aims, including, among others, the imposition of a tax on foreign capital entering Brazil (IOF
tax), changes in monetary, fiscal and tax policy, the use of price controls, currency devaluations, capital controls and limits on imports. We have no control over, nor can we foresee, any measures or policies that the Brazilian government may adopt
in the future. We may be adversely affected by changes in federal, state and municipal government policies and regulations that involve or affect factors such as:



| |  |  | economic and social stability;
| | - |  | ------------------------------



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| |  |  | interest rates;
| | - |  | ---------------



| |  |  | exchange controls and restrictions on remittances abroad;
| | - |  | ---------------------------------------------------------



| |  |  | restrictions and taxes on agriculture exports;
| | - |  | ----------------------------------------------



| |  |  | exchange rate fluctuations;
| | - |  | ---------------------------



| |  |  | inflation;
| | - |  | ----------



| |  |  | liquidity in domestic capital and credit markets;
| | - |  | -------------------------------------------------



| |  |  | expansion or contraction of the Brazilian economy, as measured by GDP growth rates;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | government policies related to our sector;
| | - |  | ------------------------------------------



| |  |  | fiscal or monetary policy and amendments to tax legislation; and
| | - |  | ----------------------------------------------------------------



| |  |  | other political, diplomatic, social or economic developments in or affecting Brazil.
| | - |  | ------------------------------------------------------------------------------------

Examples of legal changes include the imposition of the Tax on Foreign Exchange Transactions (Imposto sobre Operações
Financeiras), or IOF/Exchange tax, which was raised from zero to 6% on October 20, 2009. The IOF/Exchange tax is levied on funds transferred to Brazil by non-resident holders for investments in Brazilian financial and capital markets and
transactions related to the constitution of initial or additional guarantee margins before the BM&FBOVESPA. As of December 1, 2011, certain investments were excluded from the 6% tax and subject instead to a 2% IOF/Exchange tax. In 2009, the
Tax on Bonds and Securities Transactions, or IOF/Securities tax, was increased from zero to 1.5% on shares issued by a Brazilian company and listed on a Brazilian stock exchange for the purpose of allowing depositary receipts traded outside Brazil
to be issued. In 2011, the IOF/Securities tax was increased from zero to 1% on currency-related derivative transactions resulting in an increase of the short position exposure in foreign currency or in a decrease of the long position in foreign
currency. Since June 30, 2013, the IOF/Exchange tax and the IOF/Securities tax rates have been zero.

Uncertainty as to
whether the Brazilian government will implement any changes in policies or laws that may come to affect these or other relevant factors could contribute to economic uncertainty in Brazil and to an increase in the volatility of the capital markets in
Brazil and of securities issued in other countries by Brazilian companies.

Inflation, coupled with the Brazilian governments measures to
fight inflation, may hinder Brazilian economic growth and increase interest rates, which could have a material adverse effect on us.

Brazil has in the past experienced significantly high rates of inflation. As a result, the Brazilian government adopted monetary
policies that resulted in Brazilian interest rates being among the highest in the world. The Brazilian Central Banks Monetary Policy Committee (Comitê de Política Monetária do Banco Central), or COPOM, establishes an
official interest rate target for the Brazilian financial system based on the level of economic growth, inflation rate and other economic indicators in Brazil. Between 2004 and December 31, 2010, the official Brazilian interest rate varied from
19.75% to 8.75% per year. In response to an increase in inflation in 2010, the Brazilian government increased the official Brazilian interest rate, the SELIC rate, which was 10.75% per year on December 31, 2010 and as of June 30,
2014, was 11.00% per year. The inflation rates, as measured by the General Market Price Index (Índice Geral de Preços-Mercado), or IGP-M, and calculated by Fundação Getúlio Vargas, or FGV, were 5.10% in
2011, 7.8% in 2012, and 5.5% in 2013. Cumulative inflation in the first six months of 2014, calculated by the same index, was 2.45%.

Inflation and the government measures to fight inflation have had and may continue to have significant effects on the Brazilian economy and
our business. In addition, the Brazilian governments measures to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and slowing economic growth. On
the other hand, an easing of monetary policies of the Brazilian government may trigger increases in inflation. In the event of an increase in inflation, we may not be able to adjust our daily rates to offset the effects of inflation on our cost
structure, which may materially and adversely affect us.

An increase in interest rates may have a significant adverse effect on
us. In addition, as of June 30, 2014, certain of our loans were subject to interest rate fluctuations such as the Brazilian long term interest rate (Taxa de Juros de Longo Prazo), or TJLP, and the interbank deposit rate (Certificados
de Depósitos Interbancários), or CDI. In the event of an abrupt increase in interest rates, our ability to comply with our financial obligations may be materially and adversely affected.



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A deterioration in general economic and market conditions or in perceptions of risk in other countries,
principally in emerging countries or the United States, may have a negative impact on the Brazilian economy and us.

Economic and
market conditions in other countries, including United States and Latin American and other emerging market countries, may affect the Brazilian economy and the market for securities issued by Brazilian companies. Although economic conditions in these
countries may differ significantly from those in Brazil, investors reactions to developments in these other countries may have an adverse effect on the market value of securities of Brazilian issuers. Crises in other emerging market countries
could dampen investor enthusiasm for securities of Brazilian issuers, including ours, which could adversely affect the market price of our common shares. In the past, the adverse development of economic conditions in emerging markets resulted in a
significant flow of funds out of the country and a decrease in the quantity of foreign capital invested in Brazil. The financial crisis that began in the United States in the third quarter of 2008 created a global recession. Changes in the prices of
securities of public companies, lack of available credit, reductions in spending, general slowdown of the global economy, exchange rate instability and inflationary pressure may adversely affect, directly or indirectly, the Brazilian economy and
securities market. The recent global economic downturn and related instability in the international financial system have had, and may continue to have, a negative effect on economic growth in Brazil. The ongoing global economic downturn has reduced
the availability of liquidity and credit to fund the continuation and expansion of business operations worldwide. The recent substantial losses in worldwide equity markets, including in Brazil, could lead to an extended worldwide economic recession
or depression.

In addition, the Brazilian economy is affected by international economic and market conditions generally, especially
economic conditions in the United States. Share prices on BM&FBOVESPA, for example, have historically been sensitive to fluctuations in U.S. interest rates and the behavior of the major U.S. stock indexes. An increase in the interest rates in
other countries, especially the United States, may reduce global liquidity and investors interest in the Brazilian capital markets, adversely affecting the price of our common shares.

Our dividend distribution may no longer benefit from certain tax exemptions.

On September 16, 2013, Brazilian tax authorities issued Normative Ruling 1,397/13, which, among other things, established rules regarding
the withholding tax exemption on dividend distributions. According to Normative Ruling 1,397/13, the withholding tax exemption on dividend income would only be applicable to dividends distributed out of profits ascertained based on Brazilian
accounting rules that were effective until December 31, 2007 (old Brazilian GAAP). In this sense, if (i) taxpayers make dividend distributions based on new Brazilian accounting rules already conforming to IFRS principles, and
(ii) such distributions are made in excess of the dividends that could have been distributed had the profits been ascertained based on Brazilian accounting rules that were effective until December 31, 2007, the excess
distribution would be deemed as taxable income in the hands of the beneficiary and subject to withholding income tax at the rate of 15% or 25%.

With the enactment of Law 12,973/2014, this taxation has been eliminated, since this law determined the exemption of Income Tax on the excess
distribution of dividends provided that these have been assessed from 2008 to 2013. The risk for the dividends paid in excess remains from the profit accrued in 2014 for legal entities not opting for the advance of effects of Law 12,973/2014 for
2014, due to the provisions of RFB Regulatory Instruction 1,492/2014.

Risks Relating to our American Depository Shares and Ordinary Shares

A holder of American Depository Shares may face disadvantages compared to an ordinary shareholder when attempting to exercise voting rights.

Holders of our American Depository Shares, or ADSs, may instruct the depositary to vote the ordinary shares underlying the ADSs. For the
depositary to follow the voting instructions, it must receive them on or before the date specified in our voting materials. The depositary must try, as far as practical, subject to Brazilian law and our articles of association, to vote the ordinary
shares as instructed. In most cases, if the ADS holder does not give instructions to the depositary, it may vote the ordinary shares in favor of proposals supported by our board of directors, or, when practicable and permitted, give a discretionary
proxy to a person designated by us. We cannot be certain that ADS holders will receive voting materials in time to ensure that they can instruct the depositary to vote the underlying ordinary shares. Also, the depositary is not responsible for
failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that ADS holders may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares or other
deposited securities are not voted as requested.



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Holders of our common shares or ADSs may not receive any dividends or interest on shareholders
equity.

According to our by-laws, we must generally pay our shareholders at least 25% of our annual net income as dividends or
interest on shareholders equity, as calculated and adjusted under Brazilian corporate law. This adjusted net income may be capitalized, used to absorb losses or otherwise retained as allowed under Brazilian corporate law and may not be
available to be paid as dividends or interest on shareholders equity. Additionally, Brazilian corporate law allows a publicly traded company like ours to suspend the mandatory distribution of dividends in any particular year if our board of
directors informs our shareholders that such distributions would be inadvisable in view of our financial condition or cash availability. Holders of our common shares or our ADSs may not receive any dividends or interest on shareholders equity
in any given year if our board of directors makes such a determination or if our operations fail to generate net income.

Holders of our common
shares or ADSs in the United States may not be entitled to the same preemptive rights as Brazilian shareholders, pursuant to Brazilian legislation, in the subscription of shares resulting from capital increases made by us.

Under Brazilian law, if we issue new shares in exchange for cash or assets as part of a capital increase, subject to certain exceptions, we
must grant our shareholders preemptive rights at the time of the subscription of shares, corresponding to their respective interest in our share capital, allowing them to maintain their existing shareholding percentage. We may not legally be
permitted to allow holders of our common shares or ADSs in the United States to exercise any preemptive rights in any future capital increase unless (i) we file a registration statement for an offering of shares resulting from the capital
increase with the U.S. Securities and Exchange Commission, or SEC, or (ii) the offering of shares resulting from the capital increase qualifies for an exemption from the registration requirements of the Securities Act. At the time of any future
capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement for an offering of shares with the SEC and any other factors that we consider important in determining whether to file such a
registration statement. We cannot assure the holders of our common shares or ADSs in the United States that we will file a registration statement with the SEC to allow them to participate in any of our capital increases. As a result, the equity
interest of such holders in our company may be diluted.

If holders of our ADSs exchange them for common shares, they may risk temporarily losing,
or being limited in, the ability to remit foreign currency abroad and certain Brazilian tax advantages.

The Brazilian custodian
for the common shares underlying our ADSs must obtain an electronic registration number with the Central Bank to allow the depositary to remit U.S. dollars abroad. ADS holders benefit from the electronic certificate of foreign capital registration
from the Central Bank obtained by the custodian for the depositary, which permits it to convert dividends and other distributions with respect to the common shares into U.S. dollars and remit the proceeds of such conversion abroad. If holders of our
ADSs decide to exchange them for the underlying common shares, they will only be entitled to rely on the custodians certificate of registration with the Central Bank for five business days after the date of the exchange. Thereafter, they will
be unable to remit U.S. dollars abroad unless they obtain a new electronic certificate of foreign capital registration in connection with the common shares, which may result in expenses and may cause delays in receiving distributions. See Item
10Additional InformationExchange Controls.

Also, if holders of our ADSs that exchange our ADSs for our common shares do
not qualify under the foreign investment regulations, they will generally be subject to less favorable tax treatment of dividends and distribution on, and the proceeds from any sale of, our common shares. See Item 10Additional
InformationExchange Controls and Item 10Additional InformationTaxation-Brazilian Tax Considerations.

Holders of
our ADSs may face difficulties in protecting their interests because, as a Brazilian company, we are subject to different corporate rules and regulations and our shareholders may have fewer and less well-defined rights.

Holders of our ADSs are not direct shareholders of our company and are unable to enforce the rights of shareholders under our by-laws and
Brazilian corporate law.

Our corporate affairs are governed by our by-laws and Brazilian corporate law, which differ from the legal
principles that would apply if we were incorporated in a jurisdiction in the United States, such as the State of Delaware or New York, or elsewhere outside Brazil. Even if a holder of our ADSs surrenders its ADSs and becomes a direct shareholder,
its rights as a holder of our common shares under Brazilian corporate law to protect its interests relative to actions by our board of directors may be fewer and less well-defined than under the laws of those other jurisdictions.



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Although insider trading and price manipulation are crimes under Brazilian law, the Brazilian
securities markets are not as highly regulated and supervised as the U.S. securities markets or the markets in some other jurisdictions. In addition, rules and policies against self-dealing or for preserving shareholder interests may be less
well-defined and enforced in Brazil than in the United States and certain other countries, which may put holders of our common shares and ADSs at a potential disadvantage. Corporate disclosures also may be less complete or informative than those of
a public company in the United States or in certain other countries.

Our status as a foreign private issuer allows us to follow local corporate
governance practices, which may limit the protections afforded to investors.

We are a foreign private issuer, as defined by the
SEC for purposes of the U.S. Securities and Exchange Act of 1934, as amended, or the Exchange Act. As a result, for so long as we remain a foreign private issuer, we will be exempt from most of the corporate governance requirements of stock
exchanges located in the United States; accordingly, you will not be provided with the benefits or have the same protections afforded to shareholders of U.S. public companies.

The standards applicable to us are considerably different than the standards applied to U.S. domestic issuers. Although Rule 10A-3 under the
Exchange Act generally requires that a listed company have an audit committee of its board of directors composed solely of independent directors, as a foreign private issuer, we are relying on a general exemption from this requirement that is
available to us as a result of the features of Brazilian law applicable to our fiscal council. In addition, we are not required to, among other things:



| |  |  | have a majority of the board be independent;
| | - |  | --------------------------------------------



| |  |  | have a compensation committee, a nominating committee, or corporate governance committee of our board of directors;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | have regularly scheduled executive sessions with only non-management directors; or
| | - |  | ----------------------------------------------------------------------------------



| |  |  | have at least one executive session of solely independent directors each year.
| | - |  | ------------------------------------------------------------------------------

We are an emerging
growth company within the meaning of the Exchange Act, and if we decide to take advantage of certain exemptions from various reporting requirements applicable to emerging growth companies, our common stock could be less attractive to investors.

We are an emerging growth company within the meaning of the rules under the Exchange Act. We are eligible to take
advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with any PCAOB rules, that, if
adopted in the future, would require mandatory audit firm rotation or auditor discussion and analysis, and any future audit rule promulgated by the PCAOB (unless the SEC determines otherwise). In addition, we are not subject to the additional level
of review of our internal control over financial reporting as may occur when outside auditors attest as to our internal control over financial reporting. As a result, our stockholders may not have access to certain information they may deem
important. We will remain an emerging growth company for up to five years from the date of our initial public offering of securities under an effective registration statement under the Securities Act, though we may cease to be an emerging growth
company earlier under certain circumstances. We take advantage of the exemption from the auditor attestation report requirement and may decide to rely on other exemptions in the future. We do not know if some investors will find our common stock
less attractive as a result. The result may be a less active trading market for our common stock, and our stock price may be more volatile.

Holders
of our ADSs may face difficulties in serving process on or enforcing judgments against us and other persons.

We are organized
under the laws of Brazil, and all of the members of our board of directors, our executive officers and our independent registered public accountants reside or are based in Brazil. The vast majority of our assets and those of these other persons are
located in Brazil. As a result, it may not be possible for holders of our ADSs to effect service of process upon us or these other persons within the United States or other jurisdictions outside Brazil or to enforce against us or these other persons
judgments obtained in the United States or other jurisdictions outside Brazil. In addition, because substantially all of our assets and all of our directors and officers reside outside the United States, any judgment obtained in the United States
against us or any of our directors or officers may not be collectible within the United States. Because judgments of U.S. courts for civil liabilities based upon the U.S. federal securities laws may only be enforced in Brazil if certain conditions
are met, holders may face greater difficulties in protecting their interests in the case of actions by us or our board of directors or executive officers than would shareholders of a U.S. corporation.



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Brazilian tax laws may have an adverse impact on the taxes applicable to the disposition of our common
shares and ADSs.

Under Law No. 10,833, enacted on December 29, 2003, the gain on the disposition or sale of assets
located in Brazil by a non-Brazilian resident, whether to another non-Brazilian resident or to a Brazilian resident, may be subject to income tax withholding in Brazil. With respect to the disposition of our common shares, as they are assets located
in Brazil, a non-Brazilian resident should be subject to income tax on the gains assessed, regardless of whether the transactions are conducted in Brazil or with a Brazilian resident. With respect to our ADSs, although the matter is not entirely
clear, arguably the gains realized by a non-Brazilian resident upon the disposition of ADSs to another non-Brazilian resident will not be taxed in Brazil, on the basis that ADSs are not assets located in Brazil for the purposes of Law
No. 10,833. We cannot assure you, however, that the Brazilian tax authorities or the Brazilian courts will agree with this interpretation. As a result, gains on a disposition of ADSs by a non-Brazilian resident to a Brazilian resident, or even
to a non-Brazilian resident, in the event that courts determine that ADSs would constitute assets located in Brazil, may be subject to income tax in Brazil. See Item 10Additional InformationTaxationBrazilian Tax
Considerations.

The relative volatility and illiquidity of the Brazilian securities markets may adversely affect holders of our common shares
and ADSs.

The Brazilian securities markets are substantially smaller, less liquid and more volatile than major securities markets
in the United States. The BM&FBOVESPA, which is the principal Brazilian stock exchange, had a market capitalization of R$1.7 trillion (US$724 billion) at December 31, 2013 and an average daily trading volume of R$5.3 billion (US$2.48
billion) for 2013. In comparison, aggregate market capitalization of the companies (including U.S. and non-U.S. companies) listed on the NYSE was US$21.3 trillion at December 31, 2013 and the NYSE recorded an average daily trading volume of
US$23.9 billion for 2013. There is also significantly greater concentration in the Brazilian securities markets. The ten largest companies in terms of market capitalization represented approximately 65.7% of the aggregate market capitalization of
the BM&FBOVESPA at December 31, 2013. The ten most widely traded stocks in terms of trading volume accounted for approximately 42.3% of all shares traded on the BM&FBOVESPA in 2013. These market characteristics may substantially limit
the ability of holders of our ADSs to sell the common shares underlying our ADSs at a price and at a time when they wish to do so and, as a result, could negatively impact the market price of our ADSs themselves.

The imposition of IOF taxes may indirectly influence the price and volatility of our ADSs and our common shares.

Brazilian law imposes the Tax on Foreign Exchange Transactions, or the IOF/Exchange tax, on the conversion of reais into foreign currency and
on the conversion of foreign currency into reais. Brazilian law also imposes the Tax on Transactions Involving Bonds and Securities, or the IOF/Securities tax, due on transactions involving bonds and securities, including those carried out on a
Brazilian stock exchange.

The IOF/Exchange tax was raised from zero to 6% on October 20, 2009. As of December 1, 2011, certain
investments were excluded from the 6% tax and subject instead to a 2% IOF/Exchange tax. In 2009, the IOF/Securities tax was increased from zero to 1.5% on shares issued by a Brazilian company and listed on a Brazilian stock exchange for the purpose
of allowing depositary receipts traded outside Brazil to be issued. In 2011, the IOF/Securities tax was increased from zero to 1% on currency-related derivative transactions resulting in an increase of the short position exposure in foreign currency
or in a decrease of the long position in foreign currency. Since June 30, 2013, the IOF/Exchange tax and the IOF/Securities tax rates have been zero.

The imposition of these taxes may discourage foreign investment in shares of Brazilian companies, including our company, due to higher
transaction costs, and may negatively impact the price and volatility of our ADSs and common shares if they become listed on a stock exchange in the United States, as well as on the BM&FBOVESPA.

We may be classified as a passive foreign investment company, which could result in adverse U.S. tax consequences for U.S. investors.

We may be classified as a passive foreign investment company (a PFIC) for U.S. federal income tax purposes. Such characterization
could result in adverse U.S. tax consequences to you if you are a U.S. Holder (as defined in Item 10Additional InformationTaxationU.S. Federal Income Tax Considerations) of our common shares or ADSs. For example, if we
are a PFIC, U.S. Holders of our common shares may become subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to burdensome reporting requirements. The determination of whether or not we are a PFIC is made
on an annual basis and will depend on the composition of our income and assets from time to time. Specifically, for any taxable year we will be classified as a PFIC for U.S. tax purposes if either (i) 75% or more of our gross income in that
taxable year is passive income or (ii) the average percentage of our assets by value in that taxable year which produce or are held for the production of passive income is at least 50%. For this purpose, income from commodities transactions is
generally considered passive unless such income is derived in the active conduct of a commodities business.



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See Item 10Additional InformationTaxationU.S. Federal Income Tax
ConsiderationsPassive Foreign Investment Company.

ITEM 4INFORMATION ON THE COMPANY

A.History and Development of the Company

Overview

Our legal and commercial name is
BrasilagroCompanhia Brasileira de Propriedades Agrícolas. We are a corporation (sociedade por ações) organized under the laws of Brazil, and were incorporated on September 23, 2005. Our principal offices are
located at Avenida Brigadeiro Faria Lima, 1309, 5th floor, São Paulo, São Paulo 0145-002, Brazil, and our telephone number is +55 11 3035 5350.

We are focused on the acquisition, development and exploitation of agricultural properties that we believe possess significant potential for
cash flow generation and value appreciation. We seek to transform our acquired properties through investments in infrastructure and technologies which permit cultivation of high value-added crops and from time to time sell our developed properties
in order to realize capital gains.

Since our initial public equity offering and listing in Brazil on the BM&FBOVESPA stock exchange
in April 2006, or the IPO, and the subsequent commencement of our operations until the date hereof, we acquired 10 agricultural properties in seven Brazilian states, two of which are still in registration of ownership process, aggregating 177,228
hectares, of which 129,550 hectares were arable but less than 10% of which were cultivated when acquired and 47,678 hectares were protected by environmental regulation. We also acquired a 50% interest in Cresca S.A., a company owning 141,931
hectares of rural land in Paraguay, of which approximately 70,000 were arable but less than 12,000 hectares of which were cultivated when acquired and approximately 71,931 hectares were protected by environmental regulation. As of the date hereof,
we hold 276,440 hectares, including 7,181 hectares leased and 117,307 hectares through the joint venture Cresca S.A. Of this total, however, we are not the legal owner of two properties representing 23,422 hectares, as the registration of ownership
process for these two properties has not been finalized. We invested R$485.4 million since the IPO to acquire, develop and transform agricultural properties, of which R$44.8 million is committed to pay the remaining purchase price of the acquired
properties;

From July 1, 2013 until June 30, 2014:



| |  |  | we developed 13,000 hectares of our 179,979 hectares of arable land through the cultivation of soybeans and other value-added crops;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we acquired in December 2013 (i) 50% interest in Cresca S.A, a company owning 81,231 hectares and an option to acquire an additional 60,700 hectares, totaling 141,931 hectares of rural land located in Paraguay; (ii)
Cresud credit with Cresca; and (iii) an advisory service agreement, pursuant to which Cresud agrees to render services to Cresca in exchange for payment of fees. The total consideration of this transaction was US$19.8 million;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we made a capital increase in Cresca S.A. in December 2013 in the amount of US$6.3 million;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | our joint venture, Cresca S.A., sold 24,624 hectares of rural land in Paraguay for a total of US$14.8 million in April 2014 (payable in three installments over a period of three years), four months after acquiring them
for US$8.6 million, which was recognized on July 14, 2014, when ownership of the land was transferred;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we sold 1,164 hectares of the Araucária farm in the State of Goias for a total of R$41.3 million (the equivalent of 735 thousand bags of soybean) in June 2014 (payable in four installments over a period of
four years), five years after acquiring them for R$10.7 million;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Additionally, as of June 30, 2014, we:



| |  |  | assembled a team of 248 professionals that we believe to have significant technical expertise and experience in the agriculture sector; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | implemented SAP information management systems, which facilitate real-time monitoring of operating data, and have developed more than 50 quantitative and qualitative criteria by which we measure the performance of our
service providers and determine their remuneration.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The map below indicates the locations of our agricultural properties, their arable areas and
their current or intended production activities as of the date of this Annual Report.



LOGO



|(1) | Brasilagro signed a partnership in Partnership II Farm for up to 11 crops.
|--- | ----------------------------------------------------------------------------

|(2) | Brasilagro holds 50% interest in Cresca S.A., which owns 81,231 hectares and an option to acquire an additional 60,700 hectares, totaling 141,931 hectares.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

The table below sets forth the historical cost (taking into account the cost of acquisition of the land plus subsequent improvements), as well
as the estimated fair market value of our agricultural properties as of June 30, 2014.

We have a policy of performing annual
appraisals of the fair market value of our agricultural properties. We estimate the market value of our agricultural properties based on each propertys level of development, soil quality and maturity and agricultural potential. For more
information concerning our estimates of the fair market value of our agricultural properties, see Note 13 of our financial statements for the fiscal year ended June 30, 2014.

Our estimates of the market value of our agricultural properties are based on several premises, methodologies, estimates and subjective
judgments, all of which are inherently subject to significant commercial, economic, competitive and operational uncertainties, most of which are beyond our control and unforeseeable and therefore no assurance can be given that they are correct.
Furthermore, market values of real estate are subject to significant fluctuations and are also subject to significant commercial, economic and competitive uncertainties, most of which are beyond our control, and thus such estimates should not be
considered as indicative of the values that we will or may be able to receive in exchange for such properties. For more information on the risks we are exposed to, see Item 3Key InformationRisk Factors. The table below
indicates the historical cost of acquisition of the land and of subsequent improvements, as well as the estimated fair market value, with respect to our agricultural properties, as of June 30, 2014.



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|                  |  |                            |  |                 |  |           |         |  |                      |  |       |                                                       |  |  |                                        |  |  |                                          |       |  |              |  |         |  |  |  |      | 
|----------------- |  | -------------------------- |  | --------------- |  | --------- | ------- |  | -------------------- |  | ----- | ----------------------------------------------------- |  |  | -------------------------------------- |  |  | ---------------------------------------- | ----- |  | ------------ |  | ------- |  |  |  | ---- | 
|Property          |  | Location                   |  | AcquisitionDate |  | TotalArea |         |  | LandAcquisitionCosts |  |       | ImprovementsCost net ofdepreciationat June 30,2014(1) |  |  | Land &ImprovementsCost atJune 30, 2014 |  |  | EstimatedFair MarketValue atJune 30,2014 |       |  | Appreciation | 
|                  |  |                            |  |                 |  | (ha)      |         |  | (R$ million)         |  |       | %                                                     | 
|Cremaq Farm       |  | Baixa Grande do Ribeiro/PI |  | Oct / 06        |  |           | 27,807  |  |                      |  | 35.9  |                                                       |  |  | 28.9                                   |  |  |                                          | 64.8  |  |              |  | 251.3   |  |  |  | 288% | 
|Jatobá Farm       |  | Jaborandi/BA               |  | Mar /07         |  |           | 31,606  |  |                      |  | 33.4  |                                                       |  |  | 31.8                                   |  |  |                                          | 65.2  |  |              |  | 314.4   |  |  |  | 382% | 
|Alto Taquari Farm |  | Alto Taquari/MT            |  | Aug /07         |  |           | 5,186   |  |                      |  | 33.2  |                                                       |  |  | 0.1                                    |  |  |                                          | 33.3  |  |              |  | 101.8   |  |  |  | 206% | 
|Araucária Farm    |  | Mineiros/GO                |  | Apr /07         |  |           | 8,124   |  |                      |  | 56.2  |                                                       |  |  | 1.3                                    |  |  |                                          | 57.5  |  |              |  | 192.2   |  |  |  | 234% | 
|Chaparral Farm    |  | Correntina/BA              |  | Nov /07         |  |           | 37,183  |  |                      |  | 46.7  |                                                       |  |  | 15.1                                   |  |  |                                          | 61.8  |  |              |  | 275.4   |  |  |  | 346% | 
|Nova Buriti Farm  |  | Januaria/MG                |  | Dec/ 07         |  |           | 24,247  |  |                      |  | 21.6  |                                                       |  |  | 0.4                                    |  |  |                                          | 21.9  |  |              |  | 22.3    |  |  |  | 2%   | 
|Preferência Farm  |  | Barreiras/BA               |  | Sep /08         |  |           | 17,799  |  |                      |  | 11.0  |                                                       |  |  | 18.8                                   |  |  |                                          | 29.8  |  |              |  | 50.6    |  |  |  | 70%  | 
|                  |  |                            |  |                 |  |           |         |  |                      |  |       |                                                       |  |  |                                        |  |  |                                          |       |  |              |  |         |  |  |  |      | 
|Total             |  |                            |  |                 |  |           | 151,952 |  |                      |  | 238.0 |                                                       |  |  | 96.4                                   |  |  |                                          | 334.3 |  |              |  | 1,208.0 |  |  |  | 261% | 
|                  |  |                            |  |                 |  |           |         |  |                      |  |       |                                                       |  |  |                                        |  |  |                                          |       |  |              |  |         |  |  |  |      | 



|(1) | Consists of capital expenditures, including building, infrastructure and other improvements to the property net of depreciation expenses.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

Corporate Structure

The diagram below
illustrates our corporate structure as of the date hereof. All of our subsidiaries are incorporated in Brazil. Our investee Green Ethanol LLC is incorporated in Delaware, United States.



LOGO



|(1) | Cape Town LLC is controlled by Mr. Elie Horn.
|--- | ---------------------------------------------

|(2) | A portion of our common shares held by Cresud is deposited in Bank of New York Mellon in the form of ADRs (American Depositary Receipts).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(3) | Such shares were acquired and are held as a hedge for a swap transaction involving the same number of our common shares entered into between J.P. Morgan Chase Bank, N.A., an affiliate of J.P. Morgan Whitefrairs Inc.,
and Autonomy Master Fund Limited. Autonomy Master Fund Limited is controlled by Autonomy Capital (Jersey) LP, which is managed by Robert Gibbins, a member of our board of directors. The swap transaction matures on January 20, 2015. Under the
swap transaction, J.P. Morgan Whitefriars holds the sole power to vote and to dispose of the shares.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Agro Investment and Agro Managers are corporations controlled by the controlling shareholders of Cresud and certain of its employees, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | ETH Bioenergia S.A.
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Certain Developments since the Beginning of our Last Full Financial Year

On October 11, 2013, the Company entered into a lease agreement with respect to a property located in the municipality of Ribeiro
Gonçalves, in the state of Piauí (Partnership II), where we operate an area of 7,181 hectares which is suitable for grain crops up to 11 harvests. The property is close to Cremaq Farm, a region that has been posting
excellent grain production results. In addition to increasing planted area and operating cash flow, the partnership aims to take advantage of the regions operational structure and team, previously allocated to the Horizontina farm, which was
sold last year.

On December 12, 2013, we entered into an agreement with Cresud, our controlling shareholder, for: (i) the
acquisition of 50% interest in Cresca S.A, (ii) the assumption of Cresud credit with Cresca, and (iii) the acquisition of an advisory service agreement, pursuant to which Cresud agrees to render services to Cresca in exchange for payment of
fees. The total consideration of the transaction was US$19.8 million. Cresca had 81,231 hectares and the option to purchase an additional 60,700 hectares of rural land in Paraguay.

On December 17, 2013, we made a capital increase in Cresca in the amount of US$6.3 million so that Cresca paid for the acquisition of 35,000
hectares of land.

On April 4, 2014, Cresca sold 24,624 hectares in Paraguay, 12,312 of which are arable, for a total purchase price of
US$14.8 million (US$600 per hectare), which was not recognized until July 2014, when ownership of the land was transferred. The purchaser made an initial payment of US$1.9 million, and paid the first installment in the amount of US$4.3 million
upon the execution of the property transfer deed and the sold area possession transfer. The price balance will be paid in two annual installments.

On June 27, 2014, we sold 1,164 hectare of our Araucaria farm, located in the municipality of Mineiros, State of Goiás, 913 of
which are arable, for a total purchase price of R$41.3 million, equivalent to 735,000 soybean bags (805 bags per hectare arable). The purchaser made an initial payment of R$4.5 million, equivalent to 75,000 soybeans bags and the remaining balance
will be paid in four installments. We recognized gain on the sale of Araucaria farm in the amount of R$21.8 million. After the sale, the area of Araucaria farm held by us was 8,124 hectares, of which approximately 5,982 hectares are arable.

B.Business Overview

We
are focused on the acquisition, development and exploitation of agricultural properties that we believe possess significant potential for cash flow generation and value appreciation. We seek to transform our acquired properties through investments
in infrastructure and technologies which permit cultivation of high value-added crops and from time to time sell our developed properties in order to realize capital gains.

Agricultural Activities and Products

Independent Production

As of June 30, 2014, we were the operators with respect to our entire portfolio of agricultural properties. In the context of our
independent operations, we maintain exclusive control over our production and exclusive responsibility for the acquisition of inputs and raw materials, equipment and employees, and infrastructure investment. We currently sell a substantial portion
of our production to a small number of import/export companies. Our revenue to Brazilian purchasers was R$185.6 million for the year ended June 30, 2013 and R$131.4 million for the year ended June 30, 2014. All of our sales are to clients
located in Brazil.

We enter into short-term contractual arrangements with third-party contractors, at all stages of the production
process, for the provision of services (including our workforce), equipment, and infrastructure needs. We believe that this allows us to be more agile in adapting to market conditions as they unfold.

Our agricultural properties are managed by local managers, either on a regional level or for specific properties, depending on the location
and size of each property. At June 30, 2014, we had one manager at each of the Chaparral, Cremaq, Jatobá, Partnership II and Preferência farms and one regional manager for the Araucária and Taquari Alto.



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Leases

As an alternative to independent production, we may lease our agricultural properties to third parties. As of the date hereof, we leased to
third parties approximately 4,438 hectares of our property, representing 1.61% of our total land holdings. Generally, our leases are subject to different obligations depending on the stage of development of the subject property. With respect to
leases of our properties on which the land is undeveloped, lessees are subject to several terms and conditions, including requirements to invest and to use the techniques and equipment that we believe are necessary and appropriate for the
preparation and correction of the soil in order to facilitate agricultural production. In addition to leases of land, we may also lease individual farmhouses or warehouses to lessees, pursuant to which we receive a portion of the agricultural
production, in kind, produced by the lessee. Our leases generally last between three to ten years. Under Brazilian law, lessees have a right of first refusal to purchase farms that were previously leased by them.

Grains and Cotton

The planting season for grains runs from September to December, and harvest occurs between February and May. During the planting season for our
2013/2014 crop year, we and Cresca planted 67,822 hectares of grains at our grain farms in Brazil and Paraguay. For the years ended June 30, 2014 and 2013, revenue from sale of grains constituted 69.8% and 66.4% of our revenue, respectively.

All distribution of production from the farms is through road transport. We enter into third-party service contracts with trucking
companies to transport production from our farms to our storage facilities or to our clients.

Sugarcane

The sugarcane planting season runs from February to May, and harvesting occurs between April and November. At June 30, 2014, we had 8,892
hectares planted with sugarcane at our Araucária and Taquari Alto farms. We entered into a supply contract with ETH Bioenergia, pursuant to which we currently supply the entirety of our sugarcane production from our Alto Taquari and
Araucária farms to ETH Bioenergia. The term of this supply contract covers two full crop cycles, which consists of six crop years and five harvests, and therefore is scheduled to expire in 2021/2022. For the years ended June 30, 2014 and
2013, revenue from the sale of sugarcane accounted for 29.1% and 32.8% of our revenue, respectively.

Our farm output is distributed
through road transportation. We enter into third-party service contracts with trucking companies to transport production from our farms to our clients sugar and ethanol refineries.

Livestock

At
June 30, 2014, we and Cresca had 6,425 hectares of pasture at our Preferência farm located in the State of Bahia and at Cresca S.A. farms located in Paraguay.

Reforestation

On
June 30, 2014, we had 24,247 hectares of farmland at our Nova Buriti farm. We are currently in the process of obtaining the necessary permits in order to begin operations. In Brazil, the average time spent developing and implementing
reforestation projects with eucalyptus is approximately seven years. Given that such time frame is longer than comparable time frames for agricultural activities in general, we may decide to sell certain of our properties destined for reforestation,
before the initial harvest occurs with respect to those properties.

Investment properties

At June 30, 2014, the net book value of our investment properties was R$334.3 million, of which R$238.0 million represented land
acquisition costs and R$96.4 million (net of accumulated depreciation of R$53.9 million) represented other improvements, including building and infrastructure improvements and costs of clearing and preparing the land.



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Agricultural Properties

At June 30, 2014, we owned eight agricultural properties, totaling 179,979, hectares of arable land (not including environmental
preservation areas in accordance with Brazilian environmental law), including 7,181 hectares leased, located in the Brazilian States of Mato Grosso, Goiás, Minas Gerais, Bahia and Piauí and in Paraguay. During the planting season for
our 2013/2014 crop year, we planted 52,457 hectares of soybean, 9,965 hectares of corn, 8,892 hectares of sugarcane, 1,945 hectares of other grains (chia, sesame, sorghum and others) and 6,425 hectares of pasture. Except for part of the Nova Buriti
farm and the joint venture with Cresca S.A., we acquire and hold our agricultural properties through subsidiaries, a structure we believe will simplify the future sale of such properties in accordance with Brazilian law. In addition, we entered into
a rural partnership to operate one agricultural property, the Partnership II.

Cremaq Farm: On October 2006, the Cremaq
farm was acquired by our subsidiary Imobiliária Cremaq with a total area of 32,702 hectares for R$42.0 million. The deed was granted in April 2008 and registration was made on June 23, 2008. The property is located in the State of
Piauí, in the Northeastern region of Brazil, next to the Itaqui Port.

At the time of our acquisition, 3,000 hectares
were cultivated with grain production. At June 30, 2014, we had invested R$28.9 million (net of accumulated depreciation) in infrastructure to support the production process, including the construction of housing for our employees and service
providers, the division of farmable areas into plots to facilitate capacity for cultivation, and the installation of farm equipment, including the construction of a silo at a total cost of R$8.4 million with capacity to store 72,000 tons of grains
(such silos are capitalized under property, plant and equipment).

During the planting season for our 2013/2014 crop year, we planted
14,532 hectares of soybean and 5,409 hectares of corn at the Cremaq farm. A first-degree mortgage is recorded against 10,097 hectares of the property, for the benefit of Banco do Nordeste do Brazil  BNB, in the amount of R$25.5 million,
bearing interest at a rate of 8.50% annually and maturing on November 28, 2021.

On May 10, 2013, we sold 4,895 hectares of our
Cremaq farm, 3,201 of which are arable, for a total purchase price of R$42.1 million, or 901,481 soybean bags.

Jatobá
Farm: The Jatobá Farm has an area of 31,606 hectares and was acquired by us, in partnership with Grupo Maeda, in 2007 for R$33.0 million. On May 12, 2012, we acquired Grupo Maedas partnership stake in and became 100% owners
of Jatobá farm, through our subsidiary Jaborandi Propriedades Agrícolas. The property is located in the Municipality of Jaborandi, State of Bahia, in the Northeastern region of Brazil, which we believe to be advantageous for export
purposes due to the presence of the Port of Candeixas in the State of Bahia.

Prior to our acquisition, the Jatobá
farm was used for pine reforestation. As of June 30, 2014, we had invested R$31.8 million (net of accumulated depreciation) in the development of support infrastructure, such as the construction of houses for our employees and service
providers, an administrative office, roads and loading docks, the division of farmable areas into plots to facilitate capacity for cultivation, in addition to having invested in land development and preparation of the soil for agricultural
production. We have also invested in the installation of farm equipment, mainly including tractors that operate by GPS and machines that monitor and collect data with respect to our crops and transmit such data to our headquarters. During the
planting season for our 2013/2014 crop year, we planted 13,105 hectares of soybean and 2,044 hectares of corn at the Jatobá farm.

Alto Taquari Farm: The Alto Taquari farm has an area of 5,186 hectares and was acquired by our subsidiary
Imobiliária Mogno in August 2007 for R$33.2 million. At June 30, 2014, the outstanding balance to be paid on the acquisition price is R$26.0 million, bearing interest at the rate of the Interbank Deposit Certificate, or the CDI rate.
Registration of the property remains subject to certain conditions and obligations binding on the sellers: (i) the sellers must obtain, from the Judiciary and the Land Institute (Instituto de Terras) of the State of Mato Grosso official
recognition of our ownership of the property and (ii) the sellers must obtain from and record with the Real Estate Registry a final deed of sale, after obtaining an official certificate with INCRA, for the purchase of the property and the
discharge of the owners of any obligations related to disputes (including in rem or pledge-related disputes) in connection with the property. Because this process depends upon the approvals of different federal government agencies in Brazil,
and because the timing for such processes can be lengthy and unpredictable, we are unable to estimate the expected date for the completion of such processes.

Prior to our acquisition, the Alto Taquari farm was used for grain cultivation and livestock raising. As of June 30, 2014, we had 3,631
hectares planted with sugarcane. The 2009/2010 crop year marked the beginning of our obligations in compliance with our supply contract with ETH Bioenergia, under which we will supply the entirety of our sugarcane production from the
Araucária farm to ETH Bioenergia for a term of two complete crop cycles (six crop years and five harvests).



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Araucária Farm: The Araucária farm was acquired by our subsidiary
Imobiliária Araucária in April 2007 for R$80.0 million, in partnership with ETH Bioenergia, in the proportion of 75% and 25%, respectively. The deed for Araucária farm was granted on November 20, 2008, and it was registered
on November 24, 2008, upon which date our partnership with ETH Bioenergia was terminated and from which point we were the sole owners of such 9,682 hectares. The property is located in the Municipality of Mineiros, State of Goiás, and is
primarily used for the cultivation of sugarcane and grain.

Prior to our acquisition, the Araucária farm was used for
grain cultivation. As of June 30, 2014, we had invested R$1.3 million (net of accumulated depreciation) in infrastructure improvements. We also invested in installation of farm equipment, mainly including tractors that operate by GPS and
machines that monitor and collect data with respect to our crops and transmit such data to our headquarters.

On April 25, 2013, we
sold 394 hectares of our Araucária farm, 310 of which are arable, for a total purchase price of R$11.7 million, or 248,000 soybean bags, and, on June 27, 2014, we sold 1,164 hectare of our Araucaria Fam, 913 of which are arable, for a
total purchase price of R$41.3 million, equivalent to 735,000 soybean bags. After the sales, the area of Araucaria farm held by us was 8,124 hectares, of which approximately 5,982 hectares are arable.

The 2009/2010 crop year marked the beginning of our obligations in compliance with our supply contract with ETH Bioenergia, under which we
will supply the entirety of our sugarcane production from the Araucária farm to ETH Bioenergia for a term of two complete crop cycles (six crop years and five harvests).

Chaparral Farm: The Chaparral farm has an area of 37,182 hectares and was acquired by our subsidiary Imobiliária Cajueiro
in November 2007 for R$47.9 million. The deed was granted on September 29, 2008 and was registered on December 12, 2008. As of June 30, 2014, we had invested R$15.1 million (net of accumulated depreciation) in infrastructure
improvements and during the planting season for our 2013/2014 crop year, we planted 8,222 hectares of soybean and 2,038 hectares of corn. The property is located in the Municipality of Correntina, State of Bahia.

Nova Buriti Farm: The Nova Buriti farm has an area of 24,247 hectares and was acquired directly by us in December
2007 for R$21.6 million. The balance outstanding to be paid on the acquisition price is R$17.7 million, the amount payable is adjusted based on the IGP-M (General Market Price Index) inflation index, and the registration of the conveyance of 21,183
hectares is subject to certain conditions and obligations binding on the sellers: (i) the sellers must obtain, from the Judiciary and the Land Institute (Instituto de Terras) of the State of Minas Gerais official recognition of our
ownership of the property and (ii) the sellers must obtain from and record with the Real Estate Registry a final deed of sale, after obtaining an official certificate with INCRA, for the purchase of the property and the discharge of the owners
of any obligations related to disputes (including in rem or pledge-related disputes) in connection with the property. Because this process depends upon the approvals of different federal government agencies in Brazil, and because the timing
for such processes can be lengthy and unpredictable, we are unable to estimate the expected date for the completion of such processes. Our subsidiary Imobiliária Flamboyant holds a 13% interest in the property, and we hold the remaining 87%.
The property is located in the municipality of Januária, State of Minas Gerais in the Southeastern region of Brazil, which is in close proximity to major iron producers who utilize large quantities of biofuel, especially from eucalyptus wood,
to generate electricity.

Preferência Farm: The Preferência farm has an area of 17,799 hectares and was
acquired in September 2008 by our subsidiary Imobiliária Cajueiro for R$9.6 million. The deed was granted on September 4, 2009, and registration was made on February 24, 2010. The property is located in the Municipality of
Barreiras, State of Bahia. We use the property for livestock raising and grain cultivation. As of June 30, 2014, we had invested R$18.8 million (net of accumulated depreciation) in infrastructure improvements to the property and have planted
1,597 hectares of soybeans and 4,438 hectares of pasture.

Partnership II: On October 11, 2013, we
entered into a partnership with respect to Partnership II farm for up to 11 harvests. The Partnership II farm is located in the municipality of Ribeiro Gonçalves, in the state of Piauí. We will operate an area of 7,181 hectares, which
is suitable for grain crops. The property is close to Cremaq Farm, a region that has been posting excellent grain production results. During the planting season for our 2013/2014 crop year, we planted 7,181 hectares of soybean at the Partnership II
farm.

Cresca S.A.: On December 12, 2013, we
entered into an agreement with Cresud, our controlling shareholder, for: (i) the acquisition of 50% interest in Cresca S.A, (ii) the assumption of Cresud credit with Cresca, and (iii) the acquisition of an advisory service agreement, pursuant
to which Cresud agrees to render services to Cresca in exchange for payment of fees. The total consideration of the transaction was US$19.8 million. Cresca had 81,231 hectares and the option to purchase an additional 60,700 hectares of rural
land in Paraguay. During the planting season for our 2013/2014 crop year, we planted 4,414 hectares of soybean, 2,192 hectares of corn, 1,945 hectares of other grains and 1,987 hectares of pasture at the Cresca S.A. farms.



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Investment in ETH Bioenergia

In March 2007, we acquired an indirect minority interest in Brenco, through our 40.65% investment in Green Ethanol LLC (previously known as
Tarpon All Equities Fund LLC), which we acquired for a purchase price of US$2.5 million. Green Ethanol LLC held 2.47% of the capital stock of Brenco, including 7,600,000 warrants issued by Brenco. In March 2008, we signed contracts for the exclusive
supply to Brenco of the entirety of our sugarcane production over two full crop cycles. See Item 4Information On the CompanyMaterial Agreements.

In September 2008, Green Ethanol LLC increased its shareholding in Brenco to 1.55% of Brencos capital stock, which percentage was
subsequently increased to 3.8% in December 2008. In February 2010, ETH Bioenergia acquired substantially all of the capital stock of Brenco, and Brenco was merged into ETH Bioenergia, thereby diluting our indirect ownership interest (held through
Green Ethanol LLC) to 0.046% of Brencos capital stock as of December 31, 2010. As a result of the losses incurred by Brenco and of the significant level of debt, we carried out an impairment analysis of the investment interest in ETH
Bioenergia. As a result of such assessment, we recorded an impairment loss on our investment of R$6.6 million as of July 1, 2009.

Commodity
Futures Contracts

We enter into sales contracts for the future sale and physical delivery of our agricultural commodities to
international import/export companies. Such contracts are primarily with respect to soybean, but also include sugarcane in connection with our exclusive supply agreement to ETH Bioenergia. In the case of soybean, we may contract a fixed price for
all or part of the volume to be delivered. The price is determined according to a contractual formula based on the soybean quotation at the Chicago Board of Trade (CBOT). The price established in U.S. dollars is paid at the end of the commitment
period, in Reais, according to contractually defined exchange rates prevailing a few days before settlement. The terms of the agreements subject us to fines in the event that we fail to deliver the previously-committed volumes to the
purchaser.

Material Agreements

ETH
Bioenergia

In March 2008, we signed two contracts for the exclusive supply to ETH Bioenergia of the entirety of our
sugarcane production over two full crop cycles (for sugarcane, one full crop cycle consists of six agricultural years and five harvests, renewable upon the agreement of the parties. One of the contracts refers to our cultivation from an area of
approximately 5,718 hectares at our Araucária farm and the second to approximately 3,669 hectares at our Alto Taquari farm. The price per ton, for the purpose of these agreements, is determined based on Total Recoverable Sugar (ATR) price per
ton of sugarcane effectively delivered, with ATR corresponding to the quantity of sugar available in the raw material, minus sugar content lost during the production process, multiplied by the market prices of sugar and ethanol sold by regional
plants in the internal and external market, in each case, as determined by the São Paulo Counsel of Sugarcane, Sugar and Alcohol Producers (Conselho de Produtores de Cana, Açúcar e Álcool de São
Paulo), or CONSECANA. For the year ended June 30, 2014, sales of our sugarcane production to ETH Bioenergia were R$38.235 million, representing 29.1% of our total revenue. The purpose of contracts is not to secure a more favorable price
than the market price, since we expect that the ATR price as determined by CONSECANA will be generally equivalent to the market price, but rather to secure the sale of our sugarcane production over the long term. We believe this gives us the
predictability that makes it practicable for us to grow and commercialize sugarcane, given that sugarcane crops have a productive cycle lasting five years from the first harvest.

Cresca

On December 12, 2013,
Brasilagro executed contracts with Cresud for: (i) the acquisition of 50% interest in Cresca S.A, (ii) the assumption of Cresud credits from Cresca, and (iii) the acquisition of an advisory contract through which Cresud committed to
render services in the forest agricultural exploration to Cresca in exchange for payments of fees.

Cresca is a company exploring the
agricultural activity, which invests in agricultural and cattle raising land in Paraguay. At the purchase date it owned approximately 81,000 hectares and a contract which assured the right to purchase approximately 61,000 additional hectares of
agricultural land in the region of Mariscal Estigarribia in Paraguay. The purchase of 61,000 hectares shall occur according to the contractual terms upon the payment of the purchase price by Cresca, when the owner of the land (the other investor in
Cresca) shall transfer the ownership of the land. On July 9, 2014, 30,500 hectares were purchased, and the remaining 30,500 hectares shall be purchased until December 9, 2014.

On April 7, 2014, Cresca sold 24,624 of undeveloped hectares, which transaction was not recorded until July 2014 when ownership of the
land was transferred. After this transaction, Cresca owns 117,331 hectares, of which approximately 60,000 hectares are suitable for agricultural purposes.



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Raw Material Acquisition Risks

For the acquisition of farming inputs, our primary risks are foreign-exchange variations, the supply and demand of each input, farming
commodity prices and freight prices. Our dependence on imported raw materials is also subject to supply and customs clearance delays. We are also subject to risks regarding the availability of the specific varieties of seeds we use, which are
affected by weather conditions, among other factors.

In addition, the price of diesel fuel, which is the primary fuel used in farming
machinery and trucks, is affected by the variation in oil prices as well as by the price-control policies adopted by the Brazilian government.

Competition

The agriculture industry is
composed of widely traded commodities, where the prices are freely determined based on supply and demand. The supply side is characterized by a large number of producers, each contributing a small part of the total production and thus having minimal
influence over commodity prices, which are generally determined by indexes or exchanges in international markets, as is the case with soybean, the price of which is largely determined by the CBOT. Agricultural commodity producers therefore compete
largely based on their production costs, and their scale of production. At the domestic level, producers compete on similar conditions, whereas at the international level, competition is affected significantly by, among other factors, government
policies such as subsidies to agricultural producers, which can be substantial in developed countries.

Land acquisition is subject to
intense competition. In this case, we compete to acquire the most appropriate land for cultivating our agricultural products. We believe that this process has contributed to an increase in land prices over the years and that the strongest
competition has been from the larger groups having in-depth knowledge of the sector, management excellence and continuous objectives to increase their agricultural area portfolio. We understand that these large groups are mainly SLC
Participações, operating in four Brazilian states; and Vanguarda Agro. In addition, we may face significant competition from large international companies which have greater financial resources than we do.

Seasonality

Our principal products are
subject to seasonality variations between the crop season and the off-season. The off-season occurs between the end of the harvest of a crop year and the beginning of the harvest of the following crop year. Such period occurs at different parts of
the year depending on the agricultural product, as follows: (i) the off-season for grains in Brazil typically occurs between August and January; (ii) the off-season for cotton in Brazil typically occurs between November and May;
(iii) the off-season for sugarcane in Brazil typically occurs between December and March; and (iv) the off-season for cattle-raising in Brazil typically occurs between September and January. Because of the reduced supply of agricultural
products during each products respective off-season, prices for such products are typically higher during that time.

Throughout the
year, our working capital needs vary significantly depending on the harvest period of grains, sugarcane and other crops in Brazil. Changes in the harvest periods, resulting from unfavorable weather or financial restrictions on us, have a direct
impact on our inventory levels, advances to producers, loans and sales volume during the year.

Insurance

We believe that our insurance coverage is adequate and consistent with the usual practices adopted by other companies operating in our sector
in Brazil. However, we cannot guarantee that the coverage set forth in our insurance policies will be sufficient to protect us from all losses and damages that may occur.

As of August 2, 2014, we also have a D&O insurance policy with coverage indemnifying our managers and members of our board of
directors against civil liability for R$30 million, expiring on August 2, 2015.

Intellectual Property

In Brazil, title to a patent or trademark is acquired through the registration with the National Institute of Industrial Property
(Instituto Nacional de Propriedade Industrial, or INPI). When such right is granted, the titleholder is guaranteed exclusive use throughout Brazil for a period of ten years, which may be renewed. During the registration process, the depositor
has an expectation of right to use the deposited trademarks, which it may use in order to identify its products or services.



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We filed three trademark registration applications with the INPI for the trademark name (which
corresponds to our corporate name) BRASILAGRO  Companhia Brasileira de Propriedades Agrícolas, two of which are postponed while other trademark registration applications are being evaluated, and one of which was approved on
June 5, 2012 and expires on June 5, 2022.

We also have three trademark registration applications pending for the trademark name
BRASILAGRO  Companhia Brasileira de Propriedades Agropecuárias. One of such applications was rejected based on INPIs considerations of previously filed trademark applications. We filed an appeal and await a final
decision from the INPI regarding this application. Our business has not been affected by the refusal of this trademark registration application because such application relates to the trademark name Brasilagro  Companhia Brasileira de
Propriedades Agropecuárias, which is not our actual corporate name (our actual corporate name is Brasilagro  Companhia Brasileira de Propriedades Agrícolas) and was filed at the time as a cautionary measure when
we were in the process of deciding our legal name. In addition, the other two applications were approved on June 14, 2011, expiring on June 14, 2021 and on January 28, 2014, expiring on January 28, 2024.

In addition, we filed three trademark registration applications for the name BRASILAGRO, one of which was approved
November 1, 2011 and expires November 1, 2021; while the other two are postponed pending evaluation of other trademark registration applications by the INPI.

Risk Management

We analyze and monitor
the various risks to which our business and operations are exposed. In addition to monitoring the specific factors that directly affect our agricultural production and business operations, we also monitor the risks derived from commodity price
variations for our individual agricultural products, as well as foreign-exchange variations. Through our risk management policy coordinated among our Strategic Planning department, Risk Management Committee and board of directors, we hedge our
exposure to commodity price risks for our transactions through over-the-counter instruments including options and futures contracts negotiated in the commodity market and maintain our exposures within pre-established limits.

FIM Guardian Investment Fund

To the
extent we are unable or decide not to deploy our capital through agricultural property acquisitions or other investments, we maintain any uninvested cash and cash equivalents in our wholly-owned FIM Guardian investment fund, which holds investments
in fixed income securities in short-term, liquid investments (such as bank certificates of deposit, government securities and other cash-equivalents).

Regulation

In addition to the
descriptions of regulatory matters set forth below, see the description of certain legal proceedings, including judicial and administrative proceedings relating to regulatory matters, set forth in Item 8Financial InformationLegal
Proceedings.

Environmental Regulation

The development of our agribusiness activities depends on a number of federal, state and municipal laws and regulations related to
environmental protection. We may be subject to criminal and administrative penalties, besides being obligated to restore the environment and reimburse third parties for possible damages arising from non-compliance with such laws and regulations.

Administrative Liability

Administrative liability derives from an action or omission that results in violation of the standards of preservation, protection or
restoration of the environment. Federal Decree No. 6,514 of July 22, 2008 establishes a set of sanctions that may be imposed as a result of breach of environmental regulation. Such sanctions includes warning, fine, destruction of the
product, suspension of activities, termination of tax benefits and credit lines granted by public institutions. Fines are determined based on the relevance and economic impact of the breach and can reach R$50,000,000.00. See Item 3Key
InformationRisk Factors.

Civil Liability

Under civil law, the offender is strictly liable for any environmental damage and subject to an objective standard of care, which creates
liability regardless of negligence by the offender. Consequently, we are jointly liable with any third parties providing services for us to the extent their activities cause environmental damage. Environmental regulation also permits the regulator
to recover damages from the controlling entity through the chain of share ownership if the direct offender is unable to pay the related damage.



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Criminal Liability

Our officers, directors, employees and agents who engage in environmental crimes are subject to criminal sanctions, including fines, prison
sentences and the imposition of community service requirements.

Environmental Licenses

Environmental licensing is required for activities utilizing environmental resources that are considered potentially pollutant, or those that
may in any way cause environmental degradation. Some Brazilian states and Paraguay require licenses for agricultural and animal-raising activities.

The environmental licensing procedure includes prior, installation and operating licenses. A
prior license is granted during the preliminary phase of planning the enterprise or activity to authorize its location and concept and attesting to its environmental feasibility. An installation license authorizes the
installation of an enterprise or activity in accordance with the specifications stated in approved plans, programs and projects. An operating license authorizes an activity or enterprise to operate after the conditions stated in the
prior licenses are fulfilled and verified, with environmental protection measures and certain conditions for operations. This last license must be renewed at the end of its period of validity, which is determined by the competent
environmental agency depending on the activity being developed.

We are in the process of obtaining licenses for two of our properties,
Alto Taquari and Paraguay farms, and we are unable to estimate the amount of time that it will take to obtain such licenses.

For the Nova
Buriti farm we are studying and analyzing other environmental possibilities such as: environmental servitude, quota of environmental reserve and compensation of legal reserve.

The Araucaria farm does not require an environmental license in view of the state laws of where it is located.

We have obtained environmental licenses for our other four properties. The license for the Preferência farm was recently amended in
order to include a remaining area of cerrado (suppression of vegetation) and to expand it from livestock activity to livestock and crop. The license for the Cremaq farm was renewed on May 25, 2014 (180 days before its expiration, as required
under Brazilian laws). The license for the Jatobá farm must be renewed by May 5, 2016. Finally, we have requested an expansion of the license of the Chaparral farm in order to include a remaining area of cerrado (suppression of
vegetation).

Legal Reserve

All
rural properties in Brazil are required by law to maintain legal reserve areas. A legal reserve area is an area of each rural property where deforestation is not allowed and that is necessary for the sustainable use of natural resources,
conservation and rehabilitation of ecological processes, conservation of biodiversity and shelter and protection for native fauna and flora. These areas are required in perpetuity and in some cases are recorded as such in the real estate registry.

It is mandatory to maintain as legal reserve at least 80% of an agricultural property located in Floresta biome within
Amazonia Legal, 35% for an agricultural property in the savannah region within Amazonia Legal and 20% for an agricultural property located in other forms of native vegetation in other regions of Brazil. In Paraguay it is mandatory to maintain as
legal reserve at least 25% of all agricultural property with more than 20 hectares in forests regions and also a corridor of native vegetation at least 100 meters every 100 hectares of agricultural or livestock.

All our properties have legal reserve areas, although a part thereof has legal reserves that are in the process of being recorded at
the offices of the applicable government agency. At the date of this Annual Report, none of our current landholdings are located in Floresta biome within Amazonia Legal. Legal reserve vegetation may not be suppressed, and may be used only
under a regime of sustainable forest stewardship in accordance with technical and scientific criteria set forth in the regulations. Agricultural properties that fail to record the legal reserve are subject to daily fines. A total of 69.305,53
hectares, or 24,30% of the total area of our properties, consist of legal reserves.

Permanent Preservation Areas

Permanent preservation areas are spaces, in both public domain and private domain, where the exercise of property rights has been limited.
Permanent preservation areas include the margins of any water streams, the surroundings of headwaters and of natural water reservoirs, as well as lands inclined more than 45o. It will only be possible to modify these areas through previous
authorization by the competent state environmental body. A total of 20.162,28 hectares, or 7,07% of the total area of our properties, consist of permanent preservation areas.



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Suppression of Vegetation

We are in the process of obtaining authorization for suppression of vegetation with respect to 19,41% of our current land holdings upon which
we have not yet commenced crop cultivation operations and that are not part of our legal reserve or permanent preservation areas, from the relevant environmental authorities in the locations where required. Accordingly, with respect to such areas
where such authorization is required, we will not be able to commence crop cultivation operations in such areas until such authorizations are obtained. Because such authorizations depend upon governmental agencies, we are not able to provide an
estimate of the time frame for receiving such approvals.

Ownership of Agricultural Land in Brazil by Foreigners

On August 23, 2010, opinion No. LA-01, of August 19, 2010, issued by the Federal Attorney General (AGU) was approved by the President
of Brazil. The opinion addresses the purchase and lease of agricultural properties by Brazilian companies controlled by foreign individuals or legal entities holding the control of the capital stock of a company that owns land in Brazil. The
Attorney Generals opinion provides that Brazilian companies controlled by non-Brazilians require prior authorization to purchase agricultural properties and are subject to restrictions, including the following:

(i) the agricultural properties shall be used for agricultural, cattle raising or industrial activities, and shall be previously approved by
the Ministry of Agrarian Development or by the Ministry of Development, Industry and Foreign Trade;

(ii) the total area of agricultural
properties owned by foreigners shall not exceed the greater of (A) one fourth of the area of the municipality where the property is located; or (B) the sum of the areas held by foreigners of the same nationality shall not exceed 40% of the
area of the municipality where the property is located; and

(iii) the acquisition shall not exceed one hundred (100) indefinite
exploration modules, which are measurement units adopted within different Brazilian regions that range from five to 100 hectares, depending on the region.

New acquisitions or new lease agreements of agricultural properties by companies controlled by non-Brazilians within the
above-mentioned limits must be previously approved by INCRA. The request for the approval must be filed before the Regional Branch of INCRA (Superintendência Regional) of the State where the property is located. After that, INCRA will
analyze the compliance with the above-mentioned requirements and if the transaction is approved by INCRA, it will issue a certificate of approval. The purchase and lease of agricultural properties beyond the limits of areas and percentages mentioned
above require prior authorization from the Brazilian Congress.

In both cases, it is not possible to determine an estimated time
frame for the approval procedure, since up to the date of this Annual Report, there are no known cases of certificates having been granted. Additionally, there is no judgment so far by the Brazilian courts on the validity and constitutionality of
the contents of the Attorney Generals Opinion.

As of June 30, 2014, approximately 77% of our common shares were held by
foreigners.

On December 11, 2012, São Paulos General Comptroller of Justice (Corregedoria Geral de
Justiça do Estado de São Paulo) issued the Opinion no 461/2012-E, establishing that entities providing notary and registrar services located in the State of São Paulo are exempt from observing certain restrictions and
requirements imposed by Law no 5.709/71 and Decree no 74.965/74, regarding Brazilian companies with the majority of the capital stock composed of foreigners residing outside of Brazil or legal entities incorporated abroad. In April 2013, the
Regional Federal Court for the Third Region (Tribunal Regional Federal da 3a Região  TRF) granted an injunction in the context of a claim brought by INCRA and the Federal Government against São Paulos General
Comptroller of Justice Opinion no 461/2012-E, suspending the effects of such Opinion. In August 2013, the Regional Federal Court for the Third Region recognized its lack of jurisdiction to judge such claim and sent it to São Paulo State
Appeals Court (Tribunal de Justiça do Estado de São Paulo). As a consequence of such decision, the injunction granted by the Regional Federal Court for the Third Region was set aside, and INCRA and the Federal Government had
declined on the claim. Since then, entities providing notary and registrary services located in the State of São Paulo are, over again, exempt from observing certain restrictions and requirements imposed by Law no 5.709/71 and Decree no
74.965/74.

On June 25, 2014, the AGU and INCRA filed a suit at the Higher Federal Court (STF) against the State of São
Paulo due to the decision of São Paulo Justice Court which judged the Opinion 1 issued by AGU in 2010, unconstitutional. In this suit the stay of the preliminary order was required and, in the end, the definite annulment of Opinion 461-12-E
of the Inspector General Office of São Paulo, issued on December 03, 2012. On August 07, 2014, the decision issued by Minister Marco Aurélio Mello, rapporteur of the process, was published, denying the injunction required by
AGU and INCRA, on the basis that the period of more than 1 year and 7 months from the opinion of the Inspector General Office of São Paulo and the file of the suit in STF shows that there is no urgency in the appreciation of the
injunction request.

As of the date hereof, we are not able to provide an estimate of the timeframe for a final judgment to be issued by
the STF.



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C.Organizational Structure

See History and Development of the CompanyCorporate Structure.

D.Property, Plants and Equipment

See History and Development of the CompanyOverview, Business OverviewAgricultural Activities and
Products, Business OverviewLeases, Business OverviewInvestment Properties, Business OverviewAgricultural Properties, Business OverviewEnvironmental
Regulation and Business OverviewEnvironmental Licenses.

ITEM 
4AUNRESOLVED STAFF COMMENTS

There are no unresolved staff comments as of the date of this Annual
Report.

ITEM 5OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion in conjunction with our audited consolidated financial statements and the accompanying notes included
elsewhere in this report. Our audited annual consolidated financial statements have been prepared in compliance with IFRS as issued by IASB.

Operating
Results

Business Drivers and Measures

Brazilian Macroeconomic Environment

Our financial condition and results of operations are influenced by the Brazilian economic environment, which has improved in recent
years, according to the IBGE. For the period from 2011 through 2013, Brazilian GDP increased 2.7% in 2011, 1.0% in 2012 and 2.3% in 2013. Inflation, as measured by the Broad Consumer Price Index, or IPCA, published by the IBGE, was 6.5%, 5.8% and
5.9% per annum in 2011, 2012 and 2013, respectively. The dollar appreciated 12.6%, 8.9% and 14.6% against the Real in 2011, 2012 and 2013, respectively. From January 1 through June 30, 2014, the Real appreciated approximately
5.9% against the U.S. dollar. Unemployment decreased from 6.1% in January 2011 to 4.8% in June 2014. International reserves increased from US$350.4 billion to US$378.6 billion in the same period.

In May 2008, Brazil received investment grade status from Standard & Poors. Fitch Ratings and Moodys, two other credit
rating agencies, conferred investment grade status on Brazil in April 2008 and September 2009, respectively. We believe that such investment grade ratings reflect the maturity of Brazils financial and political institutions and its progress in
terms of fiscal policies and management of Brazils public sector debt.

Other Factors Affecting our Business

Market price variations for commodities:our principal products are subject to changes in commodities prices, including those of indexes
such as the Intercontinental Exchange and the CBOT, exchange rates, as well as other indexes linked to our debts. Commodity prices are generally influenced by international, domestic and local supply and demand, which are in turn influenced by
climactic and weather conditions, technology, and economic, commercial and political conditions, as well as exchange rates and transportation costs. For more information, see Item 3Key InformationRisk FactorsRisks Relating to
our Business and IndustryFluctuation in market prices for our agricultural products could adversely affect us and Qualitative Evaluation of Market Risks.

Foreign exchange: a portion of our income is linked to the exchange rate between the real and the U.S. dollar, and consequently our
revenue is sensitive to foreign exchange fluctuations. Certain of our commodities, such as soybean and cotton, may be priced in reais or in U.S. dollars. In addition, certain of the raw materials necessary for farming activities, such as
chemicals, pesticides and fertilizers, are priced in or based on the U.S. dollar.

Inflation:inflation does not directly
affect our revenue because our products are commodities whose prices are determined by reference to international commodity exchanges. Nevertheless, our labor and other operating costs are affected by inflation which directly affects our results of
operations.



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The table below sets forth certain market indices that affect our operating and financial
results:



|                                     |  |                     |                   |  |      |  |          |      |  |  |          |  |  |                                        
|------------------------------------ |  | ------------------- | ----------------- |  | ---- |  | -------- | ---- |  |  | -------- |  |  | ---------------------------------------
|                                     |  | Year Ended June 30,
|                                     |  | 2014                |                   |  | 2013 |  |          | 2012 |  |  | Source  
|Price of Soybean (Paranaguá)(R$/bag) |  |                     |                   |  |      | 
|Closing                              |  |                     | 70.46             |  |      |  | 69.15    |      |  |  | 73.00    |  |  | Bloomberg                              
|                                     |  |                    
|Exchange rate                        |  |                     | (R$ per US$ 1.00) |  |      | 
|Beginning                            |  |                     | 2.23              |  |      |  | 1.99     |      |  |  | 1.53     |  |  | Bloomberg                              
|Closing                              |  |                     | 2.21              |  |      |  | 2.23     |      |  |  | 2.01     |  |  | Bloomberg                              
|Average                              |  |                     | 2.29              |  |      |  | 2.04     |      |  |  | 1.79     |  |  | Bloomberg                              
|                                     |  |                     |                   | 
|ATR (R$/Kg of ATR)(1)                |  |                     | 0.47              |  |      |  | 0.44     |      |  |  | 0.49     |  |  | http://www.udop.com.br/index.php?i     
|Closing IGP-M (%)(2)                 |  |                     | 6.24%             |  |      |  | 6.31%    |      |  |  | 5.14%    |  |  | http://portalbrasil.net/igpm           
|IPCA(3)                              |  |                     | 6.52%             |  |      |  | 6.70%    |      |  |  | 4.92%    |  |  | http://portalbrasil.net/ipca           
|CDI(4)                               |  |                     | 9.63%             |  |      |  | 7.20%    |      |  |  | 10.61%   |  |  | www.cetip.com.br/astec/series_v05/pagir
|NPK(5) (R$/Ton)                      |  |                     | 872.48            |  |      |  | 1.033.72 |      |  |  | 1.064.98 |  |  | Bloomberg                              



|(1) | ATR or Total Recoverable Sugar corresponds to the quantity of sugar available in the raw material subtracted from the losses in the industrial process.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | IGP-M: General Index of Market prices is published monthly by Fundação Getúlio Vargas.
|--- | --------------------------------------------------------------------------------------

|(3) | IPCA: National Index of Broad Consumer Prices published monthly by the Brazilian Statistics Institute (IBGE).
|--- | -------------------------------------------------------------------------------------------------------------

|(4) | The CDI rate is the average of the rates of inter-bank deposits charged during the day in Brazil (accumulated in the period).
|--- | -----------------------------------------------------------------------------------------------------------------------------

|(5) | NPK is the chemical compound of farming fertilizers made up of nitrogen, phosphorus and potassium combined at a ratio of 2:20:20.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

Principal Components of Our Statement of Operations

Revenue

Our
operating revenue is derived mainly from (i) sale of grains (comprised of soybean, corn, rice, cotton and sorghum); and (ii) sugarcane and other farming products.

Taxes on sales

Taxes on sales vary depending on the target market of our production, as follows.

The levy of taxes on revenue depends on the product and market located. These are the primary taxes:



|         |  |               |  |                           |  |                
|-------- |  | ------------- |  | ------------------------- |  | ---------------
|Tax      |  | Direct Export |  | Sale to Importer/Exporter |  | Domestic market
|ICMS     |  | Not levied    |  | Not levied                |  | Levied         
|PIS      |  | Not levied    |  | Not levied                |  | Levied         
|COFINS   |  | Not levied    |  | Not levied                |  | Levied         
|FUNRURAL |  | Not levied    |  | Levied                    |  | Levied         

ICMS (Value-Added Tax on Sales and Services): ICMS is a state tax levied on the price of a product at
an average rate of 17% for transactions within a state and 7% to 12% for transactions across states. ICMS payments are not applicable to exports of goods and services.



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Federal Social Integration Program (Programa de Integração Social, or PIS) and
Social Security Financing Contribution (Contribuição para o Financiamento da Seguridade Social, or COFINS): PIS and COFINS tax payments, levied at (i) 0.65% and 3.0% of gross revenue, respectively (cumulative) or
(ii) 1.65% and 7.6%, respectively, after certain deductions (non-cumulative), depending on the business conducted and the nature of revenue earned, among other factors. On June 30, 2014, we and Jaborandi Agrícola Ltda. were subject
to noncumulative assessment for such payments, and our other subsidiaries were subjected to cumulative assessment. PIS and COFINS payments are not applicable to exports of goods and services, or sales to import/export companies located in Brazil.
Since we sell the entirety of our soybean production to such companies, such activities are not subject to PIS or COFINS payments. Brazilian law also exempts PIS and COFINS payments upon the sale of sugarcane to an entity that produces ethanol or
biofuel.

Rural Workers Assistance Fund (Fundo do Produtor Rural, or FUNRURAL): Agricultural producers are subject to a tax
of 2.3% to 2.85%, levied on total output sold. The FUNRURAL tax is not payable on exports of goods and services, but applies on sales to import/export companies located in Brazil.

Gain (loss) on sale of farms

Upon the sale of investment property, such as our farms, we recognize in the statement of operations a gain (loss) for the difference between
the sale proceeds and the carrying amount of the property sold. We account for our investment properties at cost.

Change in fair
value of biological assets

Our biological assets correspond, mainly, to our soybean, corn, sorghum, cotton and sugarcane crops and
are measured at fair value less selling expenses. These crops are not only cultivated to obtain non-real estate revenue, but also as a means of increasing the real estate value of the respective agricultural properties.

The agricultural production derived from our soybean, corn, sorghum and cotton crops is harvested after a period of time ranging from 110 to
180 days after planting, depending on the crop, variety, geographic location and climate conditions.

The sugarcane crops have a
productive cycle of five years from the first harvest, and accordingly, are classified as long term biological assets.

The fair value of
biological assets is determined upon their initial recognition and at each subsequent reporting date until harvested. The gain or loss in the variation of fair value of biological assets is determined as the difference between the fair value of the
biological assets compared to the cost incurred in planting and cultivating such biological assets. Fair value is measured based upon the selling price of the crops, determined based on the market prices of similar crops at their current growth
stage, if such price can be determined, less cost to sell at the time of harvest. If the selling price of the crops cannot be determined, then fair value is determined based upon the present value of the future cash flows expected to be generated by
the assets. The gain or loss is recognized in the statement of operations from the time of initial planting through the time of harvest.

(Impairment) reversal to net realizable value of agricultural products after harvest

A provision for impairment of inventories with respect to the market value of agricultural products is recognized when the fair value recorded
in inventories is greater than the net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of sales and selling expenses.

Cost of sales

Cost of sales for sugarcane and grains includes: (i) the historical cost of the inventories including costs of raw materials such as
seeds, fertilizers, pesticides, fuels and lubricants, as well as labor, maintenance of machines and agricultural equipment, depreciation and amortization and (ii) the difference between such historical cost and the fair value of the grains and
sugarcane at the time of harvest.

Operating expenses



| |  |  | Selling expenses: selling expenses refer mainly to shipping, storage, commissions, classification of products and other related expenses.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | General and administrative expenses: general and administrative expenses refer mainly to personnel, legal counsel, depreciation and amortization, lease payments and expenses related to our headquarters.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Financial income and expenses

Financial income and expenses consist mainly of interest from financial investments, monetary variations, interest on financial assets and
liabilities and realized and unrealized gains (losses) with derivative financial instruments.

Income and social
contribution-current and deferred taxes

Current and deferred income tax and social contribution refer to taxes on net profits. We
and our subsidiary Jaborandi Agrícola Ltda. assess such taxes under the taxable income regime, with a maximum rate of 34%, consisting of: (i) income tax, at a rate of 15% of profits; (ii) income tax surcharge of 10% levied upon
profits exceeding R$240,000 per year; (iii) social contribution on net profit, at a rate of 9%; and (iv) deferred income and social contribution taxes.

Our other subsidiaries assess such taxes under the presumed profit regime under which the tax base is computed as a percentage of revenue.
This consists of income and social contribution taxes at a rate of 15% (plus a 10% surcharge for amounts exceeding R$240,000 per year) and 9%, respectively, levied on (i) 8% and 12%, respectively, of property sales; (ii) 32% of leases and services;
and (iii) other revenue and capital gains.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have
been prepared in compliance with IFRS. We summarize our significant accounting policies, judgments and estimates in Note 2 to our audited consolidated financial statements.

The critical accounting policies described herein are important to the presentation of our financial condition and results of our operations,
requiring the most difficult, subjective and complex judgments by our management, often as a result of the need to make estimates and assumptions about matters that are inherently uncertain. While preparing our financial statements, our management
uses estimates and assumptions to record assets, liabilities and transactions. Our financial statements include different subjective and complex estimates regarding, among others, accounting for revenue recognition for grains and farm sales and
related accounts receivable, determining the fair value of derivatives, biological assets and accounting for investments in investment properties, warrant, residual value and useful life of property, plant and equipment, deferred taxes, share base
payment and legal claims. In order to provide a better understanding of how our management makes its judgments about future events, including the variables and assumptions underlying such estimates, we have identified the following critical
accounting policies:

Fair value of biological assets

The fair value of biological assets is determined using valuation methods, including the discounted cash flow method. The data for these
methods is based on standard market practices, whenever possible, and when this is not feasible, certain estimates and judgments are relied on in order to calculate fair value. Such estimates and judgments include price, productivity, planting cost
and production cost. Changes in the assumptions on these factors may affect the fair value determinations with respect to biological assets.

Residual value and useful life of property, plant and equipment and investment properties

The value and useful life of assets are assessed and adjusted when necessary at the end of each reporting period. The carrying amount of the
asset is immediately reduced to its recoverable value if the carrying amount is estimated to exceed the recoverable value.

Legal
claims

We are party to judicial and administrative lawsuits, as described in Item 8-Financial Information-Legal Proceedings.
Provisions are recorded for contingencies related to judicial lawsuits that are estimated to represent probable losses (present obligations resulting from past events where an outflow of resources is probable and can be reliably estimated). The
evaluation of the probability of loss includes the opinion of external legal advisors. Management believes that these contingencies are properly recorded and presented in the financial statements.



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Revenue recognition

We recognize our revenue when the amount of revenue can be reliably measured, is probable that future economic benefits will flow to the entity
and when specific criteria have been met for each of our activities. We perform our estimations based on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each sale.

Sale of goods

Our
revenue from grain and sugarcane sales is recognized when the significant risks and benefits of ownership of the goods are transferred to the purchaser, usually when the products are delivered to the purchaser at the determined location, according
to the agreed sales terms.

In the case of grains, we normally perform forward contracts where the price is set up by us for the total or
partial volume of grains to be sold at the delivery date, based on the calculations agreed on the selling contracts. Certain selling contracts are established in US dollars where the amount in Reais is also established based on the foreign exchange
rate according to the sale terms. The price can also be adjusted by other factors, such as humidity and other technical characteristics of grains. Upon the grains delivery, the revenue is recognized based on the price established with each purchaser
considering the foreign exchange rate on the delivery date. After the grains are delivered to the addressee, the quality and final weight are evaluated, thus determining the final price of the transaction, and adjusting the contractual amounts in
accordance with such factors as well as by the forex rate variation up to the settlement date.

Sale of farms

Sales of farms are not recognized as revenue until (i) the sale is completed, (ii) we determine that it is probable the buyer will
pay, (iii) the amount of revenue can be measured reliably, and (iv) we have transferred all risks and rewards to the buyer, and do not have a continuing involvement. The result from sales of farms is presented in the statement of
operations as Gain for sale of farm at net value of the related cost.

Revenue from leasing of land

The leasing revenues of land is recognized on the straight line basis over the leasing period. When the lease price is defined in quantities of
agricultural products or livestock, the lease amount is recognized based on the price of the agricultural product or livestock effective at the balance sheet date or at the date established in contract. The amounts received in advance as leasing,
when applicable, are recognized in current liabilities. Leasing revenues in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Investment properties

The land of rural properties purchased by us is stated at acquisition cost, which does not exceed its net realizable value and is presented in
Non-current assets. The fair value of the investment properties are obtained through valuation reports of the farms prepared by internal experts. The valuation is carried out according to market practices. Certain factors such as
location, type of soil, climate of the region, calculation of the improvements, presentation of the elements and calculation of the land value are all taken into account during the valuation process.

Deferred income and social contribution taxes

Deferred income and social contribution taxes are calculated to take into account all tax timing differences as follows: (1) income or
expenses which are not yet taxable or deductible, such as gain on fair value of biological assets and provisions for contingencies, respectively; and (2) tax loss carryforwards, which have no expiration, when realization or recovery in future
periods is considered probable.



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Deferred tax assets are generated under the taxable income regime only, based on our business
plan. The business plan includes consideration of a variety of factors including the 30% annual limitation for utilizing tax loss carryforwards and changes in the Brazilian economic conditions. We evaluate whether a valuation allowance is required
for these assets and deferred tax assets are recognized only to the extent that is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be
utilized, otherwise a valuation allowance is recorded. We also include in our evaluation the limitation of utilizing up to only 30% of annual taxable income in connection with recognition of tax loss carryforwards.

Fair value of financial instruments

When the fair value of the financial assets and liabilities presented in the balance sheet cannot be obtained in the active market, it is
determined using valuation techniques, including the discounted cash flow method. The data for such methods is based on those practiced in the market, when possible; however, when it is not viable, a certain level of judgment is required to
establish the fair value. The judgment includes considerations on the data used, such as liquidity risk, credit risk, and volatility. Changes in the assumptions about these factors may affect the presented fair value of financial instruments.

Transactions with share-based payment

We measure the cost of transactions to be settled with shares with employees based on the fair value of equity instruments on the grant date.
The estimate of the fair value of share-based payments requires the determination of the most adequate pricing model to grant equity instruments, which depends on the grant terms and conditions. It also requires the determination of the most
adequate data for the pricing model, including the expected option life, volatility and dividend yield, and the corresponding assumptions.

Jobs Act

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain
reporting requirements for qualifying public companies.

Subject to certain conditions set forth in the JOBS Act, if, as an emerging
growth company, we choose to rely on such exemptions we may not be required to, among other things, provide an auditors attestation report on our system of internal controls over financial reporting pursuant to Section 404, and
these exemptions will apply until we are no longer an emerging growth company. The JOBS Act provides emerging growth companies an election to comply with new or revised accounting standards on a delayed basis for those standards
that have a different effective date for public and private companies. However such election is limited to companies that prepare their financial statements and report in accordance with accounting principles generally accepted in the United States
of America. As our financial statements are prepared in accordance with IFRS, such accommodation is not available to us, and we will be required to apply new or revised accounting standards under IFRS as from the effective date established in the
corresponding standard.



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Results of Operations

The following discussion of our results of operations is based on our consolidated financial statements prepared in accordance with IFRS. The
discussion of the results of our business segments is based upon financial information reported for each of the segments of our business, as presented in the table below.

The following tables set forth operating results of each of our segments and the reconciliation of these results of our segments to our
consolidated statement of operations.



|                                                                                                   |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ------ |  | ------- | --------- |  |  | ---------- | - |  | ----- | ------ | - | ------------ |  | ------ | - |  |  | ------- | -
|                                                                                                   |  | Year Ended June 30, 2014 |         
|                                                                                                   |  | Total                    |          |   | Grains |  |         | Sugarcane |  |  | RealEstate |   |  | Other |        |   | Notallocated | 
|                                                                                                   |  | (R$ thousand)            |         
|Net revenue                                                                                        |  |                          | 131,314  |   |        |  | 91,645  |           |  |  | 38,235     |   |  |       |       |   |              |  | 1,434  |   |  |  |        |  
|Gain on sale of farms                                                                              |  |                          | 21,845   |   |        |  |        |           |  |  |           |   |  |       | 21,845 |   |              |  |       |   |  |  |        |  
|Changes in fair value of biological assets and agricultural products                               |  |                          | 1,092    |   |        |  | 2,059   |           |  |  | (719       | ) |  |       |       |   |              |  | (248   | ) |  |  |        |  
|(Impairment) reversal of impairment of net realizable value of agricultural products after harvest |  |                          | (2,043   | ) |        |  | (2,040  | )         |  |  |           |   |  |       |       |   |              |  | (3     | ) |  |  |        |  
|Cost of sales                                                                                      |  |                          | (138,535 | ) |        |  | (98,529 | )         |  |  | (34,790    | ) |  |       |       |   |              |  | (5,216 | ) |  |  |        |  
|                                                                                                   |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Gross profit (loss)                                                                                |  |                          | 13,673   |   |        |  | (6,865  | )         |  |  | 2,726      |   |  |       | 21,845 |   |              |  | (4,033 | ) |  |  |        |  
|                                                                                                   |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Operating income (expenses)                                                                        |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Selling expenses                                                                                   |  |                          | (10,239  | ) |        |  | (7,283  | )         |  |  |           |   |  |       | (2,430 | ) |              |  | (526   | ) |  |  |        |  
|General and administrative expenses                                                                |  |                          | (30,378  | ) |        |  |        |           |  |  |           |   |  |       |       |   |              |  |       |   |  |  | (30,378 | )
|Other operating income (expenses), net                                                             |  |                          | 286      |   |        |  |        |           |  |  |           |   |  |       |       |   |              |  |       |   |  |  | 286     |  
|Equity pick up                                                                                     |  |                          | (705     | ) |        |  |        |           |  |  |           |   |  |       |       |   |              |  |       |   |  |  | (705    | )
|Financial income                                                                                   |  |                          | 40,051   |   |        |  | 8,556   |           |  |  |           |   |  |       | 714    |   |              |  |       |   |  |  | 30,781  |  
|Financial expenses                                                                                 |  |                          | (41,611  | ) |        |  | (5,009  | )         |  |  |           |   |  |       | (3,439 | ) |              |  |       |   |  |  | (33,163 | )
|                                                                                                   |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Profit (loss) before income and social contribution taxes                                          |  |                          | (28,923  | ) |        |  | (10,601 | )         |  |  | 2,726      |   |  |       | 16,690 |   |              |  | (4,559 | ) |  |  | (33,179 | )
|Income and social contribution taxes                                                               |  |                          | 15,561   |   |        |  | 3,604   |           |  |  | (927       | ) |  |       | (2,270 | ) |              |  | 1,550  |   |  |  | 13,604  |  
|                                                                                                   |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Profit (loss) for the year                                                                         |  |                          | (13,362  | ) |        |  | (6,997  | )         |  |  | 1,799      |   |  |       | 14,420 |   |              |  | (3,009 | ) |  |  | (19,575 | )
|                                                                                                   |  |                          |          |   |        |  |         |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  



|                                                                                                   |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ------ |  | -------- | --------- |  |  | ---------- | - |  | ----- | ------ | - | ------------ |  | ------ | - |  |  | ------- | -
|                                                                                                   |  | Year Ended June 30, 2013 |         
|                                                                                                   |  | Total                    |          |   | Grains |  |          | Sugarcane |  |  | RealEstate |   |  | Other |        |   | Notallocated | 
|                                                                                                   |  | (R$ thousand)            |         
|Net revenue                                                                                        |  |                          | 185,647  |   |        |  | 123,237  |           |  |  | 61,022     |   |  |       |       |   |              |  | 1,388  |   |  |  |        |  
|Gain on sale of farms                                                                              |  |                          | 54,815   |   |        |  |         |           |  |  |           |   |  |       | 54,815 |   |              |  |       |   |  |  |        |  
|Changes in fair value of biological assets and agricultural products                               |  |                          | 2,289    |   |        |  | (22,681  | )         |  |  | 25,060     |   |  |       |       |   |              |  | (90    | ) |  |  |        |  
|(Impairment) reversal of impairment of net realizable value of agricultural products after harvest |  |                          | 1,659    |   |        |  | 1,659    |           |  |  |           |   |  |       |       |   |              |  |       |   |  |  |        |  
|Cost of sales                                                                                      |  |                          | (170,643 | ) |        |  | (105,401 | )         |  |  | (61,157    | ) |  |       |       |   |              |  | (4,085 | ) |  |  |        |  
|                                                                                                   |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Gross profit (loss)                                                                                |  |                          | 73,767   |   |        |  | (3,186   | )         |  |  | 24,925     |   |  |       | 54,815 |   |              |  | (2,787 | ) |  |  |        |  
|                                                                                                   |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Operating income (expenses)                                                                        |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Selling expenses                                                                                   |  |                          | (14,028  | ) |        |  | (9,790   | )         |  |  | (68        | ) |  |       | (4,294 | ) |              |  | 124    |   |  |  |        |  
|General and administrative expenses, net                                                           |  |                          | (29,233  | ) |        |  |         |           |  |  |           |   |  |       |       |   |              |  |       |   |  |  | (29,233 | )
|Other operating income (expense)                                                                   |  |                          | (3,539   | ) |        |  |         |           |  |  |           |   |  |       |       |   |              |  |       |   |  |  | (3,539  | )
|Financial income                                                                                   |  |                          | 38,000   |   |        |  | 14,656   |           |  |  |           |   |  |       | 148    |   |              |  |       |   |  |  | 23,196  |  
|Financial expenses                                                                                 |  |                          | (38,591  | ) |        |  | (19,856  | )         |  |  |           |   |  |       | (17    | ) |              |  |       |   |  |  | (18,718 | )
|                                                                                                   |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Profit (loss) before income and social contribution taxes                                          |  |                          | (26,376  | ) |        |  | (18,176  | )         |  |  | 24,857     |   |  |       | 50,652 |   |              |  | (2,663 | ) |  |  | (28,294 | )
|Income and social contribution taxes                                                               |  |                          | 2,351    |   |        |  | 6,180    |           |  |  | (8,451     | ) |  |       | (3,967 | ) |              |  | 905    |   |  |  | 7,684   |  
|                                                                                                   |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  
|Profit (loss) for the year                                                                         |  |                          | 28,727   |   |        |  | (11,996  | )         |  |  | 16,406     |   |  |       | 46,685 |   |              |  | (1,758 | ) |  |  | (20,610 | )
|                                                                                                   |  |                          |          |   |        |  |          |           |  |  |            |   |  |       |        |   |              |  |        |   |  |  |         |  



39



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##### Table of Contents

|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------ | -------- | - | ---------- |  | ------- | ------ |  |  | --------- | - |  | ----- | ------- | - | ------------ |  | ------ | - |  |  | ------- | -
|                                                                                                   |  | Year Ended June 30, 2012 |         
|                                                                                                   |  | Total                    |          |   | Realestate |  |         | Grains |  |  | Sugarcane |   |  | Other |         |   | Notallocated | 
|                                                                                                   |  | (R$ thousand)            |         
|Net revenue                                                                                        |  |                          | 146,218  |   |            |  |        |        |  |  | 105,874   |   |  |       | 40,183  |   |              |  | 161    |   |  |  |        |  
|Gain on sale of farms                                                                              |  |                          | 12,987   |   |            |  | 12,987  |        |  |  |          |   |  |       |        |   |              |  |       |   |  |  |         |  
|Changes in fair value of biological assets and agricultural products                               |  |                          | (417     | ) |            |  |        |        |  |  | (3,106    | ) |  |       | 2,689   |   |              |  |       |   |  |  |        |  
|(Impairment) reversal of impairment of net realizable value of agricultural products after harvest |  |                          | (2,663   | ) |            |  |        |        |  |  | (2,429    | ) |  |       | (234    | ) |              |  |       |   |  |  |        |  
|Cost of sales                                                                                      |  |                          | (136,447 | ) |            |  |        |        |  |  | (97,970   | ) |  |       | (37,150 | ) |              |  | (1,327 | ) |  |  |        |  
|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Gross profit (loss)                                                                                |  |                          | 19,678   |   |            |  | 12,987  |        |  |  | 2,369     |   |  |       | 5,488   |   |              |  | (1,166 | ) |  |  |        |  
|Operating income (expenses)                                                                        |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Selling expenses                                                                                   |  |                          | (4,015   | ) |            |  | (392    | )      |  |  | (3,623    | ) |  |       |        |   |              |  |       |   |  |  |        |  
|General and administrative                                                                         |  |                          | (28,892  | ) |            |  |        |        |  |  |          |   |  |       |        |   |              |  |       |   |  |  | (28,892 | )
|Other operating revenue                                                                            |  |                          | 10       |   |            |  |        |        |  |  |          |   |  |       |        |   |              |  |       |   |  |  | 10      |  
|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Operating income (loss)                                                                            |  |                          | (13,219  | ) |            |  | 12,595  |        |  |  | (1,254    | ) |  |       | 5,488   |   |              |  | (1,166 | ) |  |  | (28,882 | )
|Net financial income                                                                               |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Financial income                                                                                   |  |                          | 38,073   |   |            |  | 428     |        |  |  |          |   |  |       |        |   |              |  |       |   |  |  | 37,645  |  
|Financial expenses                                                                                 |  |                          | (44,299  | ) |            |  | (97     | )      |  |  | (16,639   | ) |  |       |        |   |              |  |       |   |  |  | (27,563 | )
|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Profit (loss) before income and social contribution taxes                                          |  |                          | (19,445  | ) |            |  | 12,926  |        |  |  | (17,893   | ) |  |       | 5,488   |   |              |  | (1,166 | ) |  |  | (18,800 | )
|Income and social contribution taxes                                                               |  |                          | 12,845   |   |            |  | (4,395  | )      |  |  | 6,084     |   |  |       | (1,866  | ) |              |  | 397    |   |  |  | 12,625  |  
|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|                                                                                                   |  |                          | (6,600   | ) |            |  | 8,531   |        |  |  | (11,809   | ) |  |       | 3,622   |   |              |  | (769   | ) |  |  | (6,175  | )
|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Profit (loss) for the year                                                                         |  |                          | (6,600   | ) |            |  | 8,531   |        |  |  | (11,809   | ) |  |       | 3,622   |   |              |  | (769   | ) |  |  | (9,766  | )
|                                                                                                   |  |                          |          |   |            |  |         |        |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Total assets                                                                                       |  |                          | 735,762  |   |            |  | 402,037 |        |  |  | 78,604    |   |  |       | 37,376  |   |              |  |       |   |  |  | 217,745 |  
|Total liabilities                                                                                  |  |                          | 176,794  |   |            |  | 40,858  |        |  |  |          |   |  |       |        |   |              |  |       |   |  |  | 135,936 |  

The table below shows a summary of our statement of operations for the periods indicated:



|                                                                                                   |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  
|-------------------------------------------------------------------------------------------------- |  | ------------------- | ---------- | - | ------------- |  | ---------- | ---- |  |  | ---------- | - |  |  | ---------- | -
|                                                                                                   |  | Year ended June 30, |           
|                                                                                                   |  | 2014                |            |   | 2014          |  |            | 2013 |  |  | 2012       |  
|                                                                                                   |  | (US$ thousand)      |            |   | (R$ thousand) | 
|Net revenue                                                                                        |  |                     | 59,620     |   |               |  | 131,314    |      |  |  | 185,647    |   |  |  | 146,218    |  
|Gain on sale of farms                                                                              |  |                     | 9,918      |   |               |  | 21,845     |      |  |  | 54,815     |   |  |  | 12,987     |  
|Changes in fair value of biological assets and agricultural products                               |  |                     | 496        |   |               |  | 1,092      |      |  |  | 2,289      |   |  |  | (417       | )
|(Impairment) Reversal of impairment of net realizable value of agricultural products after harvest |  |                     | (928       | ) |               |  | (2,043     | )    |  |  | 1,659      |   |  |  | (2,663     | )
|Cost of sales                                                                                      |  |                     | (62,899    | ) |               |  | (138,535   | )    |  |  | (170,643   | ) |  |  | (136,447   | )
|Gross profit                                                                                       |  |                     | 6,207      |   |               |  | 13,673     |      |  |  | 73,767     |   |  |  | 19,678     |  
|Selling expenses                                                                                   |  |                     | (4,649     | ) |               |  | (10,239    | )    |  |  | (14,028    | ) |  |  | (4,015     | )
|General and administrative expenses                                                                |  |                     | (13,793    | ) |               |  | (30,378    | )    |  |  | (29,233    | ) |  |  | (28,892    | )
|Other operating income (expenses), net                                                             |  |                     | 129        |   |               |  | 285        |      |  |  | (3,539     | ) |  |  | 10         |  
|Equity pick up                                                                                     |  |                     | (320       | ) |               |  | (704       | )    |  |  |           |   |  |  |           |  
|                                                                                                   |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  
|Operating income (loss)                                                                            |  |                     | (12,426    | ) |               |  | (27,363    | )    |  |  | 26,967     |   |  |  | (13,219    | )
|Financial income                                                                                   |  |                     | 18,184     |   |               |  | 40,051     |      |  |  | 38,000     |   |  |  | 38,073     |  
|Financial expenses                                                                                 |  |                     | (18,893    | ) |               |  | (41,611    | )    |  |  | (38,591    | ) |  |  | (44,299    | )
|                                                                                                   |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  
|Profit (loss) before income and social contribution taxes                                          |  |                     | (13,135    | ) |               |  | (28,923    | )    |  |  | 26,376     |   |  |  | (19,445    | )
|Income and social contribution taxes                                                               |  |                     | 7,065      |   |               |  | 15,561     |      |  |  | 2,351      |   |  |  | 12,845     |  
|                                                                                                   |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  
|Profit (loss) for the year                                                                         |  |                     | (6,070     | ) |               |  | (13,362    | )    |  |  | 28,727     |   |  |  | (6,600     | )
|                                                                                                   |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  
|Profit (loss) attributable to:                                                                     |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  
|Equity holders of the parent                                                                       |  |                     | (6,070     | ) |               |  | (13,362    | )    |  |  | 28,727     |   |  |  | (5,572     | )
|Non-controlling interests                                                                          |  |                     |           |   |               |  |           |      |  |  |           |   |  |  | (1,028     | )
|Outstanding shares at the year end                                                                 |  |                     | 58,422,400 |   |               |  | 58,422,400 |      |  |  | 58,422,400 |   |  |  | 58,422,400 |  
|Basic earnings (loss) per share                                                                    |  |                     | (0.10      | ) |               |  | (0.23      | )    |  |  | 0.49       |   |  |  | (0.10      | )
|Diluted earnings (loss) per share                                                                  |  |                     | (0.10      | ) |               |  | (0.23      | )    |  |  | 0.49       |   |  |  | (0.10      | )
|                                                                                                   |  |                     |            |   |               |  |            |      |  |  |            |   |  |  |            |  



40



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##### Table of Contents

Year Ended June 30, 2014 Compared to Year Ended June 30, 2013

Net revenue

Net revenue decreased
R$54.3 million from R$185.6 million for the year ended June 30, 2013 to R$131.3 million for the year ended June 30, 2014. This decrease was mainly due to:



| | i. | Revenue from grain sales: revenue from grain sales decreased R$31.6 million from R$123.2 million for the year ended June 30, 2013 (reflecting sales of 165,000 tons at an average price of R$746.89 per ton) to
R$91.6 million for the year ended June 30, 2014 (reflecting sales of 122,415 tons at an average price of R$748.64 per ton). The decrease in revenue from grain sales is mainly due to the decrease in the amount produced from 165,000 tons
during the year ended June 30, 2013 to 122,415 tons for the year ended June 30, 2014, as a result of reduction in soybean and corn yields, due to the severe drought that hit the farms in Bahia, which had a direct impact on the upturn in
grain revenue; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | Revenue from sugarcane sales: revenue from sugarcane sales decreased R$22.8 million from R$61.0 million (reflecting sales of 1,048,000 tons at an average price of R$58.23 per ton) for the year ended June 30,
2013 to R$38.2 million (reflecting sales of 570,820 tons at an average price of R$66.98 per ton) for the year ended June 30, 2014. This decrease was mainly due to the difference in the harvest period, which in the previous year was concentrated
between June and October 2012 and in the current year was between April and September 2013.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|          |  |                       |        |  |                    |  |        |                      |  |  |         |  |  |      |           |  |      |  |        |  |  |  |         | 
|--------- |  | --------------------- | ------ |  | ------------------ |  | ------ | -------------------- |  |  | ------- |  |  | ---- | --------- |  | ---- |  | ------ |  |  |  | ------- | 
|          |  | Planted Area(hectare) |        |  | Productivity(tons) |  |        | Revenue(R$ thousand) | 
|          |  | 2014                  |        |  | 2013               |  |        | 2014                 |  |  | 2013    |  |  | 2014 |           |  | 2013 | 
|Grain     |  |                       | 59,271 |  |                    |  | 60,063 |                      |  |  | 122,415 |  |  |      | 165,000   |  |      |  | 91,645 |  |  |  | 123,237 | 
|Sugarcane |  |                       | 8,892  |  |                    |  | 9,198  |                      |  |  | 570,820 |  |  |      | 1,048,000 |  |      |  | 38,235 |  |  |  | 61,022  | 

Gain on the sale of farms

Gain on the sale of farms decreased R$32.9 million from R$54.8 million for the year ended June 30, 2013 to R$21.8 million for the year
ended June 30, 2014. The decrease was due to the sale of 19,648 hectares of land in the year ended June 30, 2013, corresponding to: (i) total area of 14,359 hectares of the Horizontina farm; and (ii) areas of the Araucária (394 hectares)
and Cremaq (4,895 hectares) farms, for which we recognized a gain of R$54.8 million representing the difference between the proceeds from the sale of R$122.7 million and the carrying amount of the farms, while, during the year ended June 30,
2014, we sold 1,164 hectares of the Araucária farm, for which we recognized a gain of R$21.8 million, representing the difference between the carrying amount of the farm and the proceeds from the sale of R$33.7 million.

Changes in fair value of biological assets and agricultural products

Changes in fair value of biological assets and agricultural products decreased from a profit of R$2.3 million for the year ended June 30,
2013 to a profit of R$1.1 million for the year ended June 30, 2014, resulting mainly from a decrease in sugarcane areas and adjustments in price assumptions of the cutting, carrying and transportation costs of sugarcane. Change in the variation
of the fair value of biological assets are determined by the difference between their fair value and their carrying amount. Carrying amount includes investments and costs effectively incurred until the moment of appraisal.

(Impairment) reversal of impairment of net realizable value of agricultural products after harvest

Reversal of impairment to net realizable value of agricultural products after harvest decreased from a gain of R$1.7 million for the year ended
June 30, 2013 to a loss of R$2.0 million for the year ended June 30, 2014. Such variations result from the difference in the price of grain inventories from the time of harvest to the closing of the respective accounting period.

Cost of sales

Cost of sales
decreased by R$32.1 million to R$138.5 million for the year ended June 30, 2014 from R$170.6 million for the year ended June 30, 2013, resulting mainly from:



| | i. | Cost of grains sold: our average cost per ton of grains sold increased by R$166.09 per ton, from R$638.79 per ton (corresponding to 165,000 tons at a total cost of R$105.4 million) for the year ended
June 30, 2013 to R$804.88 per ton (corresponding to 122,415 tons at a total cost of R$98.5 million) for the year ended June 30, 2014.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | Cost of sugarcane sold: our average cost per ton of sugarcane sold was R$58.4 per ton (corresponding to 1,048,000 tons at a total cost of R$61.2 million) for the year ended June 30, 2013 and R$60.9 per ton
(corresponding to 570,820 tons at a total cost of R$34.8 million) for the year ended June 30, 2014.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41



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##### Table of Contents

Gross profit

For the reasons mentioned above, our gross profit for the year ended June 30, 2014 was R$13.7 million, representing a decrease of R$60.1
million as compared to R$73.8 million for the year ended June 30, 2013. The change in gross profit is attributable mainly to:



| | i. | the decrease in the gain on the sale of farms from R$54.8 million, for the year ended in June 30, 2013 (sale of the Horizontina farm and areas of the Araucária and Cremaq farms) to R$21.8 million for the
year ended June 30, 2014 (sale areas of the Araucária farms);
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | the 37% decrease in the supply of sugarcane to ETH, which generated revenue of R$38.2 million (570,820 tons); and
| | --- | -----------------------------------------------------------------------------------------------------------------



| | iii. | the 26% decrease in revenue from grain sales, which generated revenue of R$91.6 million in June 30, 2013 (122,415 tons).
| | ---- | ------------------------------------------------------------------------------------------------------------------------

Selling expenses

Selling expenses
decreased R$3.8 million from R$14.0 million for the year ended June 30, 2013 to R$10.2 million for the year ended June 30, 2014, primarily as a result of (i) the decrease in commissions on farm sales from R$4.3 million for the year
ended June 30, 2013 to R$1.0 million for the year ended June 30, 2014; and (ii) the decrease in the expenses with storage from R$6.1 million for the year ended June 30, 2013 to R$2.8 million for the year ended June 30, 2014,
as a result of the reduction of grains storage during the period.

General and administrative expenses

General and administrative expenses increased by R$1.2 million from R$29.2 million for the year ended June 30, 2013 to R$30.4 million
for the year ended June 30, 2014.



|                                |  |                     |         |   |                                       |  |       |               |  |  |                                       |   |  |  |       | 
|------------------------------- |  | ------------------- | ------- | - | ------------------------------------- |  | ----- | ------------- |  |  | ------------------------------------- | - |  |  | ----- | 
|                                |  | Year ended June 30, |        
|                                |  | 2014                |         |   | 2013                                  | 
|                                |  | (R$thousand)        |         |   | % ofGeneral andadministrativeexpenses |  |       | (R$ thousand) |  |  | % ofGeneral andadministrativeexpenses |  
|Depreciation and amortization   |  |                     | (1,118  | ) |                                       |  | 3.7%  |               |  |  | (1,295                                | ) |  |  | 4.4%  | 
|Personnel expenses              |  |                     | (19,589 | ) |                                       |  | 64.5% |               |  |  | (17,971                               | ) |  |  | 61.5% | 
|Expenses with services rendered |  |                     | (4,841  | ) |                                       |  | 15.9% |               |  |  | (5,436                                | ) |  |  | 18.6% | 
|Leases and rents                |  |                     | (698    | ) |                                       |  | 2.3%  |               |  |  | (648                                  | ) |  |  | 2.2%  | 
|Other expenses                  |  |                     | (4,132  | ) |                                       |  | 13.6% |               |  |  | (3,883                                | ) |  |  | 13.3% | 
|                                |  |                     |         |   |                                       |  |       |               |  |  |                                       |   |  |  |       | 
|Total                           |  |                     | (30,378 | ) |                                       |  | 100%  |               |  |  | (29,233                               | ) |  |  | 100%  | 

The 3.9% increase in general and administrative expenses was primarily a result of the increase in personnel
expenses due to the higher payroll following the 7.5% annual pay rise.

Other income (expenses), net

For the year ended June 30, 2014, we recorded other income, net of other expenses, of R$286 thousand of which R$2.4 million are reversal
in provisions for probable losses in legal proceedings, which were partially offset by R$1.2 million of provisions for contingencies for probable losses in legal proceedings and R$900 thousand of losses on sale of property, plant and equipment. We
recorded a loss of R$3.5 million for the year ended June 30, 2013, as a result of provisions for contingencies for probable losses in legal proceedings.

Equity pick up

For the year ended
June 30, 2014, we recorded a loss of R$705 thousand as Equity pickup in connection with R$17 thousand of the result of Green Ethanol participation and R$687 thousand of Crescas result. The investment in Cresca was booked on the purchase
date in December 2013. The Company began booking equity pick up from Crescas result beginning January 2014.



42



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##### Table of Contents

Financial income

Financial income increased R$2.0 million from R$38.0 million for the year ended June 30, 2013 to R$40.0 million for the year ended
June 30, 2014, primarily due to (i) interest on receivables in the amount of R$19.1 million for the year ended June 30, 2014, compared to R$10.3 million in the previous year, related mainly to the adjustment in the present value on
sale of farms; (ii) foreign exchange variations of R$6.0 million for the year ended June 30, 2014, compared to R$5.1 million in the previous year, as a result of margin deposits as collateral for derivative transactions, and
(iii) increase by R$3.9 million of interest income on financial investments from R$5.6 million in fiscal 2013 to R$9.5 million in the current fiscal year which was consistent with the increase in the amount invested in the FIM Guardian
investment fund. This movement was partially offset by the decrease of R$13.2 million in unrealized profit with derivatives transactions of R$2.8 million for the year ended June 30, 2014 compared to R$16.0 million in the previous year.

Financial expenses

Financial
expenses increased R$3.0 million from R$38.6 million for the year ended June 30, 2013 to R$41.6 million for the year ended June 30, in 2014, mainly as a result of (i) an increase in monetary variation from R$1.5 million in 2013 to
R$2.3 million for the year ended June 30, 2014; (ii) an increase of R$11.2 million in the present value of receivables from sale of farm from R$2.3 million for the year ended June 30, 2013 to R$13.6 million for the year ended June 30,
2014; (iii) foreign exchange variations of R$5.7 million for the year ended June 30, 2014, compared to R$3.1 million in the previous year, as a result of margin deposits as collateral for derivative transactions, and (iv) interest on
liabilities from R$9.6 million in 2013 to R$10.7 million for the year ended June 30, 2014 in connection with long term loans and financing to develop the farms. This movement was partially offset by the decrease of the net impact on realized
and unrealized losses from derivatives by R$12.6 million as a result of lower volume of commodities and foreign exchange fluctuations in 2014 compared to the previous year.

Income tax and social contribution

We recognized a credit for income and social contribution taxes of R$15.6 million for the year ended June 30, 2014, as compared to a
credit of R$2.3 million for the same period in 2013. This increase is mainly due to (i) a decrease in the current income taxes and social contribution from R$7.9 million for the year ended June 30, 2013 to R$2.8 million for the year ended
June 30, 2014, as a result of the receivables from farm sales during the year and (ii) an increase in the deferred income taxes and social contribution taxes, mainly related to recognition of credit on tax loss carry forwards from R$10.3
million for the year ended June 30, 2013 to R$18.3 million for the year ended June 30, 2014.

Profit (loss) for the year

For the reasons discussed above, we recorded a loss of R$13.4 million for the year ended June 30, 2014, as compared to a profit of R$28.7
million for the same period in 2013.

Year Ended June 30, 2013 Compared to Year Ended June 30, 2012

Net revenue

Net revenue increased
R$39.4 million, from R$146.2 million for the year ended June 30, 2012 to R$185.6 million for the year ended June 30, 2013. This increase was mainly due to:



| | i. | Revenue from grain sales: revenue from grain sales increased R$17.4 million, from R$105.9 million during the year ended June 30, 2012 (reflecting sales of 167,000 tons at an average price of R$633.98 per
ton) to R$123.2 million for the year ended June 30, 2013 (reflecting sales of 165,000 tons at an average price of R$746.89 per ton). The increase in revenue from grain sales is mainly due to the increase in the planted area from 53,882 hectare
during the year ended June 30, 2012 to 60,063 hectare for the year ended June 30, 2013. The revenue from grain sales in June 30, 2013 recorded less growth than in previous years, as a result of reduction in soybean and corn yields,
due to the severe drought that hit the farms in the Northeast, especially in Bahia, had a direct impact on the upturn in grain revenue; and
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | Revenue from sugarcane sales: revenue from sugarcane sales increased R$20.8 million, from R$40.2 million (reflecting sales of 636,000 tons at an average price of R$63.18 per ton) for the year ended June 30,
2012 to R$61.0 million (reflecting sales of 1,048,000 tons at an average price of R$58.23 per ton) for the year ended June 30, 2013. This increase was due to sugarcane sales to ETH Bioenergia pursuant to our sugarcane supply agreement with ETH
Bioenergia.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



43



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##### Table of Contents

|          |  |                       |        |  |                    |  |        |                      |  |  |           |  |  |      |         |  |      |  |         |  |  |  |         | 
|--------- |  | --------------------- | ------ |  | ------------------ |  | ------ | -------------------- |  |  | --------- |  |  | ---- | ------- |  | ---- |  | ------- |  |  |  | ------- | 
|          |  | Planted Area(hectare) |        |  | Productivity(tons) |  |        | Revenue(R$ thousand) | 
|          |  | 2013                  |        |  | 2012               |  |        | 2013                 |  |  | 2012      |  |  | 2013 |         |  | 2012 | 
|Grain     |  |                       | 60,063 |  |                    |  | 53,882 |                      |  |  | 165,000   |  |  |      | 167,000 |  |      |  | 123,237 |  |  |  | 105,874 | 
|Sugarcane |  |                       | 9,198  |  |                    |  | 9,000  |                      |  |  | 1,048,000 |  |  |      | 636,000 |  |      |  | 61,022  |  |  |  | 40,183  | 

Gain on the sale of farms

Gain on the sale of farms increased R$41.8 million, from R$12.9 million during the year ended June 30, 2012 to R$54.8 million for year
ended June 30, 2013. The increase was due to the sale of the Horizontina farm and areas of the Araucária and Cremaq farms, for which we recognized a gain of R$54.8 million representing the difference between the proceeds from the sale of
R$122.7 million. During the year ended June 30, 2012, we recognized a gain on the sale of the São Pedro farm of R$12.9 million representing the difference between the proceeds from the sale of R$23.3 million.

Change in fair value of biological assets and agricultural products

Change in value of biological assets and agricultural products increased from a loss of R$417 thousand for the year ended June 30, 2012 to
a profit of R$2.3 million for the year ended June 30, 2013, resulting mainly from an increase in the productivity and sugarcane areas. Change in the variation of the fair value of biological assets are determined by the difference between their
fair value and their book value. Book value includes investments and costs effectively incurred until the moment of appraisal.

(Impairment)
reversal of impairment of net realizable value of agricultural product after harvest

Impairment to net realizable value of
agricultural products after harvest increased from a loss of R$2.6 million for the year ended June 30, 2012 to a gain of R$1.7 million for the year ended June 30, 2013. Such variations result from the difference in the price of grain
inventories from the time of harvest to the closing of the respective accounting period.

Cost of sales

Cost of sales increased by R$34.2 million, to R$170.6 million for the year ended June 30, 2013, from R$136.4 million for the year ended
June 30, 2012, resulting mainly from:



| | i. | Cost of grains sold: our average cost per ton of grains sold increase by R$51.96 per ton, from R$586.83 per ton (corresponding to 167,000 tons at a total cost of R$98.0 million) for the year ended June 30,
2012 to R$638.79 per ton (corresponding to 165,000 tons at a total cost of R$105.4 million) for the year ended June 30, 2013.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | Cost of sugarcane sold: our average cost per ton of sugarcane sold was R$58.4 per ton (corresponding to 636,000 tons at a total cost of R$37.2 million) for the year ended June 30, 2012 and R$58.4 per ton
(corresponding to 1,048,000 tons at a total cost of R$61.2 million) for the year ended June 30, 2013.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross profit

For the reasons mentioned above, for the year ended June 30, 2013 our gross profit was R$73.8 million, representing an increase of R$54.1
million as compared to R$19.7 million for the year ended June 30, 2012. The change in gross profit is attributable mainly to:



| | i. | the increase in the gain on the sale of farms, from R$12.9 million, in June 30, 2012 (sale of the São Pedro farm), to R$54.8 million in June 30, 2013 (sale of the Horizontina farm and areas of the
Araucária and Cremaq farms);
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | the 52% increase in the supply of sugarcane to ETH, which generated revenue of R$61 million (1,048,000 tons); and
| | --- | -----------------------------------------------------------------------------------------------------------------



| | iii. | the 16% increase in revenue from grain sales, which rose from R$105.9 million in June 30, 2012 (167,000 tons) to R$123.2 million in June 30, 2013 (165,000 tons).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

Selling expenses

Selling expenses
increased R$10.0 million, from R$4.0 million for the year ended June 30, 2012 to R$14.0 million for the year ended June 30, 2013, primarily as a result of (i) our average expenses per ton of freight increase by R$3.19 per ton, from
R$10.6 per ton (corresponding to 167,000 tons at a total cost of R$1.7 million) for the year ended June 30, 2012 to R$13.79 per ton (corresponding to 165,000 tons at a total cost of R$2.3 million) for the year ended June 30, 2013;
(ii) commissions on farm sales, in the total amount of R$4.3 million; (iii) cotton processing costs of R$2.2 million, which did not occur in 2012; and (iv) silo plant expenses of R$3.3 million, which did not occur in 2012.



44



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##### Table of Contents

General and administrative expenses

General and administrative expenses increased by R$341 thousand, from R$28.9 million for the year ended June 30, 2012 to R$29.2 million
for year ended June 30, 2013.



|                                |  |                     |         |   |                                       |  |      |               |  |  |                                       |   |  |  |      |  
|------------------------------- |  | ------------------- | ------- | - | ------------------------------------- |  | ---- | ------------- |  |  | ------------------------------------- | - |  |  | ---- | -
|                                |  | Year ended June 30, |        
|                                |  | 2013                |         |   | 2012                                  | 
|                                |  | (R$thousand)        |         |   | % ofGeneral andadministrativeexpenses |  |      | (R$ thousand) |  |  | % ofGeneral andadministrativeexpenses |  
|Depreciation and amortization   |  |                     | (1,295  | ) |                                       |  | 4.4  | %             |  |  | (1,127                                | ) |  |  | 3.9  | %
|Personnel expenses              |  |                     | (17,971 | ) |                                       |  | 61.5 | %             |  |  | (15,832                               | ) |  |  | 54.8 | %
|Expenses with services rendered |  |                     | (5,436  | ) |                                       |  | 18.6 | %             |  |  | (5,328                                | ) |  |  | 18.4 | %
|Leases and rents                |  |                     | (648    | ) |                                       |  | 2.2  | %             |  |  | (632                                  | ) |  |  | 2.2  | %
|Other expenses                  |  |                     | (3,883  | ) |                                       |  | 13.3 | %             |  |  | (5,973                                | ) |  |  | 20.7 | %
|                                |  |                     |         |   |                                       |  |      |               |  |  |                                       |   |  |  |      |  
|Total                           |  |                     | (29,233 | ) |                                       |  | 100  | %             |  |  | (28,892                               | ) |  |  | 100  | %

The 1% increase in general and administrative expenses was primarily a result of (i) the increase in
personnel expenses due to the higher payroll following the 8% annual pay rise and the booking of R$1.2 million in share-based payments as part of the executive stock option plan; and (ii) the reduction in other expenses resulting from the
monitoring of the farms legal and tax proceedings, transaction costs from the acquisition of Jatobá farm, and tax payments, which did not occur in 2013.

Other income (expenses), net

For
the year ended June 30, 2012, we recorded other gains of R$10 thousand in connection with equipment sales, as compared to a loss of R$3.5 million for the year ended June 30, 2013, as a result of changes to the provisions for contingencies
for probable losses in legal proceedings.

Financial income

Financial income decreased R$73 thousand, from R$38.1 million for the year ended June 30, 2012 to R$38.0 million for the same period in
2013, primarily due to (i) remeasurements in the amount of R$11.0 million for the year ended June 30, 2013, compared to R$1.8 million in the previous year, related mainly to the adjustment in the present value on sale of farms;
(ii) foreign exchange variations of R$5.1 million for the year ended June 30, 2013, compared to R$2.9 million in the previous year, as a result of margin deposits as collateral for derivative transactions; (iii) unrealized profit from
derivatives transactions of R$16.0 million for the year ended June 30, 2013, compared to R$8.2 million in the previous year. This movement was partially offset by the decrease of R$19.2 million due to (i) decrease by R$7.1 million of
interest Income on financial investments from R$12.7 million in 2012 to R$5.6 million in the current year which was consistent with the decrease on the amount invested in the FIM Guardian investment fund (ii) decrease by R$1.9 million
regarding to monetary variations (iii) decrease by R$6.5 million related to the gain on measurement of receivables from sale of farms performed over the year.

Financial expenses

Financial
expenses decreased R$5.7 million, from R$44.3 million for the year ended June 30, 2012 to R$38.6 million for the same period in 2013, mainly as a result of (i) the net impact on realized and unrealized losses from derivatives have
decreased by R$10.2 million as a result of lower volume of commodities and foreign exchange fluctuations in 2013 compared to the previous year; (ii) a decrease in monetary variation, from R$2.2 million in 2012 to R$1.5 million for the year
ended June 30, 2013, and (iii) an increase of R$3.4 million in the present value on receivables from sale of farm.

Income tax and social
contribution

As a result of the above mentioned factors, we recognized a gain associated with income tax and social contribution
of R$2.3 million for the year ended June 30, 2013, as compared to a gain of R$12.8 million for the same period in 2012. This decrease is mainly due to (i) an increase in the current income tax and social contribution from R$1.8
million for the year ended June 30, 2012 to R$7.9 million for the year ended June 30, 2013, as a result of the receivables from farms sales during the year and (ii) a decrease in the deferred income tax and social contribution from a
gain of R$14.7 million for the year ended June 30, 2012, to R$10.3 million for the year ended June 30, 2013, as a result of higher recognition of the deferred income tax and social contribution on gain of the fair value of biological
assets.



45



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##### Table of Contents

Profit (loss) for the year

For the reasons discussed above, we recorded net income of R$28.7 million for the year ended June 30, 2013, as compared to a net loss of
R$6.6 million for the same period in 2012.

B. Liquidity and Capital Resources

As of June 30, 2014, we hold R$86.7 million in cash and cash equivalents. Of this amount, approximately R$14.3 was held offshore and as a
result there may be tax duties if such amounts are repatriated to Brazil. We usually hold cash and cash equivalents in Certificate of Deposits and Repurchase Agreements issued by banks rated at least AA by Moodys and Brazilian and American
government bonds.

We believe that our current liquidity and capital resources, together with our ability to obtain loans and credit
facilities and, when appropriate, to raise equity in the capital markets, are sufficient to meet our cash flow needs.

Sources and
Uses of Funds

We finance our investments both by using our own resources as well as through loans and credit facilities with
development banks and governmental development agencies, under which interest rates are lower than market rates, due to the fact that such credit facilities have long-term characteristics specific to the development agencies. Our principal sources
of financing are discussed below under the heading Indebtedness and cash and cash equivalents and our main uses of funds include:

Acquisition of land: Since the beginning of our operations to June 30, 2014, we invested R$485.4 million in the acquisition,
development and transformation of agricultural properties, of which R$44.8 million are currently committed to pay the remaining purchase price of such properties.

Development of land: Since the beginning of our operations and up to June 30, 2014, we invested a total of R$115.7 million in the
development of land for grain cultivation, of which R$51.9 million was financed through loans with Banco do Nordeste do Brasil, or BNB, R$15.0 million was financed through loans with Itaú Bank and R$48.8 million was funded through our own
resources.

Cultivation of sugarcane: Since the beginning of our operations to June 30, 2014, we invested a total of
R$54.4 million in the development of land for sugarcane cultivation, of which R$16.9 million was financed through loans with BNDES (Brazilian Development Bank) and R$37.5 million was funded through our own resources.

Improvements: Since the beginning of our operations to June 30, 2014, we invested a total of R$28.6 million in connection with
improvements, of which R$5.9 million was financed through loans with Banco do Nordeste do Brasil, and R$22.7 million was funded through our own resources.

Machinery and vehicles: Since the beginning of our operations to June 30, 2014, we invested a total of R$21.4 million in
connection with purchases of machinery and vehicles, of which R$13.5 million was financed through loans with BNDES, and R$7.9 million was funded through our own resources.

The investments made in 2014 totaled R$15.0 million, all of which were used for the development of land for cultivation of grains.

Cash Flows

Our
cash flow generation from operating activities may vary from period to period depending on fluctuations in our sales and service revenue, costs of goods sold, operating income (expenses), and may also vary within such periods as a result of
seasonality. Operating activities primarily refer to revenue generated from the sale of grains and sugarcane.

Investment activities
primarily refer to the acquisition of agricultural properties, developing of such properties for cultivation, purchasing machines, and remodeling, construction and improvements to agricultural properties and sale of farms.



46



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##### Table of Contents

Financing activities primarily refer to loans and credit facilities, principally from development
banks, for the development of new projects and the purchase of machines and equipment.

The following table summarizes our cash flows for
the periods indicated:



|                                                    |  |                     |        |   |               |  |        |      |  |  |         |   |  |  |         |  
|--------------------------------------------------- |  | ------------------- | ------ | - | ------------- |  | ------ | ---- |  |  | ------- | - |  |  | ------- | -
|                                                    |  | Year ended June 30, |       
|                                                    |  | 2014                |        |   | 2014          |  |        | 2013 |  |  | 2012    |  
|                                                    |  | (US$ thousand)      |        |   | (R$ thousand) | 
|CONSOLIDATED CASH FLOW                              |  |                     |        |   |               |  |        |      |  |  |         |   |  |  |         |  
|Net cash flows from (used in) operating activities  |  |                     | 10,388 |   |               |  | 22,880 |      |  |  | (46,472 | ) |  |  | (10,691 | )
|Net cash flows from (used in) investment activities |  |                     | (4,472 | ) |               |  | (9,850 | )    |  |  | 54,085  |   |  |  | (24,375 | )
|Net cash flows from (used in) financing activities  |  |                     | (898   | ) |               |  | (1,979 | )    |  |  | 617     |   |  |  | (33,085 | )
|                                                    |  |                     |        |   |               |  |        |      |  |  |         |   |  |  |         |  
|Net change in cash and cash equivalents             |  |                     | 5,017  |   |               |  | 11,051 |      |  |  | 8,230   |   |  |  | (68,151 | )
|                                                    |  |                     |        |   |               |  |        |      |  |  |         |   |  |  |         |  

Years ended June 30, 2014 and 2013

Operating activities:Net cash generated from operating activities was R$22.8 million for the year ended June 30, 2014 compared to
net cash used in operating activities of R$46.5 million for the year ended June 30, 2013. The change was primarily due to the collection of the receivables from 2013/2014 crop and the increase of advance from customers of R$12.9 million for the
year ended June 30, 2014.

Investment activities: Net cash in investment activities changed from R$54.1 million
generated for the year ended June 30, 2013 to R$10.4 million used in the same period in 2014. This change was mainly due to the decrease in the cash received from sales of farm from R$86.5 million in 2013 to R$35.2 million for the year ended
June 30, 2014 and the investment to acquire Cresca S.A. in the amount of R$23.0 million.

Financing activities: Net
cash in financing activities changed from R$617 thousand generated for the year ended June 30, 2013 to R$1.9 million used in the same period in 2014. Such change was primarily due to a R$9.8 million net proceeds from loans and financing
disbursed during the year, partially offset by R$5.8 million of dividends paid and R$1.9 million of treasury shares purchased under the share buyback program.

Years ended June 30, 2013 and 2012

Operating activities: Net cash used in operating activities was R$46.5 million for the year ended June 30, 2013 compared to R$10.7
million during the same period in 2012. The change was primarily due to gain on sale of farm in the amount of R$54.8 million in 2013 compared to R$12.9 million in 2012 and unrealized gain on derivatives in the amount of R$11.7 million in 2013
compared to a loss in the amount of R$12.8 million in 2012 and also an increase in trade account receivables.

Investment
activities: Net cash in investment activities changed from R$24.4 million used for the year ended June 30, 2012 to R$54.1 million generated for the same period in 2013. This change was mainly due to the increases in the cash received from
sales of farm in the amount of R$86.5 million.

Financing activities: Net cash in financing activities changed from R$33.1
million used for the year ended June 30, 2012, to R$617 thousand generated for the same period in 2013. Such change was primarily due to an R$18.6 million in payments of farms financing and the acquisition of shares of Jaborandi Propriedades
Agrícolas S.A. and Jaborandi Agrícola Ltda by R$12.9 million in 2012, which did not occur in 2013.



47



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##### Table of Contents

Indebtedness and Cash and Cash Equivalents

Our total consolidated indebtedness (loans and financing) was R$120.2 million as of June 30, 2014, as compared to R$101.8 million as
of June 30, 2013. Our short-term indebtedness as of June 30, 2014 amounted to R$62.3 million, as compared to R$44.9 million as of June 30, 2013. Of the total indebtedness outstanding as of June 30, 2014, 48.2% consisted of
medium and long-term debt, as compared to 55.9% as of June 30, 2013.

The table below sets
forth the balance of our financial indebtedness as of the dates indicated:



|                                                  |  |                                      |  |                |         |  |      |  |         | 
|------------------------------------------------- |  | ------------------------------------ |  | -------------- | ------- |  | ---- |  | ------- | 
|                                                  |  |                                      |  | As of June 30, |        
|                                                  |  |                                      |  | 2014           |         |  | 2013 | 
|                                                  |  |                                      |  | (R$ thousand)  |        
|Current                                           |  | Annual interest rate and
charges (%) |  |                |         |  |      |  |         | 
|Financing for agricultural costs  BNB(3)         |  | 7.23 and 10.69                       |  |                | 44,712  |  |      |  | 31,403  | 
|Financing Cremaq and Jaborandi Project  BNB(3)   |  | 7.23                                 |  |                | 12,742  |  |      |  | 7,845   | 
|Financing of Machines and Equipment               |  | 5.50 to 8.70                         |  |                | 1,814   |  |      |  | 2,164   | 
|Financing of sugarcane  Itaú                     |  | TJLP(1)+3.00 to 3.10                 |  |                | 2,985   |  |      |  | 3,517   | 
|                                                  |  |                                      |  |                |         |  |      |  |         | 
|                                                  |  |                                      |  |                | 62,253  |  |      |  | 44,929  | 
|Non-current                                       |  |                                      |  |                |         |  |      |  |         | 
|Financing of sugarcane  Itaú                     |  | TJLP+3.00 to 3.10(1)                 |  |                | 1,610   |  |      |  | 4,287   | 
|Financing of Machinery and Equipment  FINAME     |  | 5.5 to 8.70                          |  |                | 1,056   |  |      |  | 2,769   | 
|Financing Cremaq and Jaboarandi Project  BNB (2) |  | 7.23 and SELIC/TJLP + 4.45           |  |                | 55,243  |  |      |  | 49,868  | 
|                                                  |  |                                      |  |                |         |  |      |  |         | 
|                                                  |  |                                      |  |                | 57,909  |  |      |  | 56,924  | 
|                                                  |  |                                      |  |                |         |  |      |  |         | 
|                                                  |  |                                      |  |                | 120,162 |  |      |  | 101,853 | 



|(1) | Long-term Interest Rate (TJLP).
|--- | -------------------------------

|(2) | Banco do Nordeste (BNB) (Gross Rate).
|--- | -------------------------------------

Current indebtedness

At June 30, 2014, our short-term indebtedness was R$62.3 million, as compared to R$44.9 million at June 30, 2013.

Non-current indebtedness

At June 30, 2014, our long-term indebtedness was R$57.9 million, as compared to R$56.9 million at June 30, 2013.

Our indebtedness is primarily composed of loans and credit facilities with development banks and government agencies, by means of direct or
indirect disbursements, and acquisitions payable with regard to our agricultural properties. Interest rates are generally lower than prevailing rates in Brazil, due to the fact that these credit facilities have long-term characteristics and other
terms specific to the development agencies.

At June 30, 2014 and 2013, the amounts outstanding on our loans and credit agreements
were R$120.2 million and R$101.8 million, respectively.



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Financing Agreements

The table below summarizes our material outstanding loans and financing agreements as of June 30, 2014.



|                                                   |  |                                                                                   |  |                 |        |  |                    |  |        |               |  |                                            |  |  |            |  |  |            |        |  |  |  |        | 
|-------------------------------------------------- |  | --------------------------------------------------------------------------------- |  | --------------- | ------ |  | ------------------ |  | ------ | ------------- |  | ------------------------------------------ |  |  | ---------- |  |  | ---------- | ------ |  |  |  | ------ | 
|Type of credit transaction                         |  | Creditor/Transfer agent                                                           |  | Amountdisbursed |        |  | Outstandingbalance |  |        | Interest rate |  | Maturity                                   |  |  | Current    |  |  | Noncurrent |       
|Sugarcane Financing                                |  | Banco Itaú BBA S.A.                                                               |  |                 | 8,382  |  |                    |  | 4,595  |               |  | TJLP + asurcharge
of 3.00% and 3,10%/ year |  |  | 07/15/2015 |  |  |            | 2,985  |  |  |  | 1,610  | 
|Agricultural Costs Financing                       |  | Banco do Nordeste Brasil S.A. BNB                                                |  |                 | 42,223 |  |                    |  | 44,712 |               |  | 7.23% and 10.69%/year                      |  |  | 10/12/2013 |  |  |            | 44,712 |  |  |  | __     | 
|FINAME Financing                                   |  | Banco Itaú Unibanco S.A./ Banco Votorantim S.A./ HSBC Bank Brasil S.A.            |  |                 | 7,912  |  |                    |  | 2,870  |               |  | 5.50% and8.70%/year                        |  |  | 11/15/2016 |  |  |            | 1,814  |  |  |  | 1,056  | 
|Cremaq e Jaborandi Financing                       |  | Banco do Nordeste do Brasil S.A.  BNB                                            |  |                 | 19,709 |  |                    |  | 27,143 |               |  | 7.23%/year (2)                             |  |  | 10/28/2021 |  |  |            | 7,661  |  |  |  | 19,482 | 
|Cremaq e Jaborandi (Jaborandi Ltda.) (1) Financing |  | Banco do Nordeste do Brasil S.A.  BNB / Banco Itaú Unibanco S.A.(Jaborandi Ltda) |  |                 | 35,526 |  |                    |  | 40,842 |               |  | 7.23% and SELIC/TJLP + 4.45%/year (2)      |  |  | 07/14/2019 |  |  |            | 5,081  |  |  |  | 35,761 | 



|(1) | Borrower: Jaborandi Agricola Ltda.
|--- | ----------------------------------

|(2) | Includes a payment discount of 15%, resulting in final rate of 7.23% per year.
|--- | ------------------------------------------------------------------------------

Farming equipment

From June 2007 to November 2011 we entered into financing agreements with BNDES (Brazilian Development Bank) to access FINAME PSI credit line
through three different intermediary banks to finance our Cremaq and Araucária farming equipment. These loans bear interest rates that range from 10 to 4.50% per year and the maturity dates range from December 2011 to November 2016. The
total amount disbursed was R$ 13.5 million. The equipment is pledged as guarantee to FINAME PSI.

Land Development

On October 28, 2009, we entered into a financing agreement with BNB (Northeastern Development Bank) of R$25.5 million bearing an interest
rate of 8.5% per year (or 7.23% if the debt is paid as agreed). This loan agreement financed the purchase of inputs needed to prepare Cremaq farm land for agricultural production and to build a storage unit (silo) as well. This financing is
guaranteed by (i) the mortgage of our Cremaq farm and (ii) a R$1.3 million escrow account, of which the beneficiary is Banco do Nordeste do Brasil (BNB).

On July 14, 2009, Jaborandi Agrícola Ltda entered into a financing agreement with BNB in the amount of R$26.3 million, bearing an
interest rate of 8.5% per year (or 7.23% if the debt is paid as agreed). This loan financed the purchase of inputs needed to prepare the Jatobá farm for agricultural production. This financing is guaranteed by (i) the mortgage of
our Jatobá farm and (ii) a R$14 million escrow account, of which the beneficiary is Banco do Nordeste do Brasil (BNB).



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On October, 10, 2013, Jaborandi Agrícola Ltda entered into a financing agreement with
BNDES to access FINEM credit line (financing for long-term investment projects that are supported by their own cash flow) and Banco Itaú as intermediary bank. The total amount is R$29.6 million and it bears an interest rate ranging from TJLP
plus 3.45% per year to Selic (Short-Term interest rate) plus 3.45% per year. R$15 million has already been disbursed and the remaining will be disbursed in due time. This loan finances Jatobá farm land development and implementation
of its first soy crop. This loan is guaranteed by the mortgage of our Preferencia farm. The maturity date is October 2020.

Sugarcane

From
November 2009 to December 2012, we entered into various agreements with BNDES to access the BNDES AUTOMÁTICO credit line through Banco Itaú to finance Araucária farm sugarcane planting. The total amount disbursed was
R$15.4 million and the interest rates range from 1.95% to 3.1% per year plus TJLP (BNDES long-term interest rate). Under such line, we obtained periodic loans as follows: (i) on July 30, 2008, we obtained R$5.8 million,
(ii) on September 29, 2009, we obtained R$1.7 million, (iii) on November 17, 2009, we obtained R$3.1 million, (iv) on January 15, 2010, we obtained R$0.8 million, (v) on August 10, 2010, we obtained R$1.3
million and on (vi) October 15, 2010, we obtained R$2.6 million. The maturity dates range from July 2013 to July 2015. The total outstanding loans with BNDES AUTOMÁTICO as of June 30, 2014 was R$4.6 million.

Capital Expenditures

We are focused on
the acquisition, development and exploitation of agricultural properties and the acquisition and development of properties that we believe have significant potential for cash flow generation and value appreciation. Our principal capital expenditures
include the following:

Land Acquisition and Development: Our principal capital expenditures derive from the acquisition and
development of agricultural properties. Since the beginning of our operations through June 30, 2014, we invested R$485.4 million in the acquisition, development and transformation of agricultural properties. As of June 30, 2014, the amount of
R$44.8 million is the outstanding payable for the purchase of such properties.

Cultivation of grains: The arable area of
our grain farms amounts to 129,909 hectares, of which 8,112 hectares were already developed for the cultivation of grains at the time we acquired the properties, while 51,662 hectares were brought to development and productivity by us. Since the
beginning of our operations through June 30, 2014, we invested R$115.7 million, in the transformation of areas for the cultivation of grains.

Cultivation of sugarcane: Since the beginning of our operations through June 30, 2014, we made investments of R$54.4 million in
connection with the transformation of 1,078 hectares of pasture and 7,653 hectares of grains at our Araucária and Alto Taquari farms into areas for sugarcane cultivation.

Development of land for pasture and livestock raising: We have recently initiated the development of our Preferência farms
14,237 hectares of useful area into pasture for livestock. This is done through: (i) transformation of areas covered by native vegetation or unproductive pasture into productive pasture capable of intensive livestock raising; and (ii) the
construction of the necessary infrastructure for livestock raising, such as confinements, fences and drinking troughs. Since the beginning of our operations through June 30, 2014, we invested R$20.5 million in the development of land for
pasture and livestock raising.

Improvements to land: Since the beginning of our operations through June 30, 2014, we
invested R$28.6 million in the construction of farmhouses, lodgings, warehouses, storage facilities, silos, roads and other improvements on our farms.

Machines and vehicles: Since the beginning of our operations through June 30, 2014, we invested R$21.4 million in the acquisition
of tractors, sowing and harvesting machines and other agricultural equipment.

Our total capital expenditures for the year ended
June 30, 2014 were R$22.6 million.

Equity

Our total equity excluding non-controlling interest amounted to R$583.9 million as of June 30, 2014 and R$586.9 million as of
June 30, 2013.



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C. Research and Development, Patents and Licenses, etc.

We do not currently have research and development policies and have not incurred in research and development expenditures in prior years.

D. Trend Information

We will continue to
operate in a highly competitive and regulated environment that will pose continued risks and threats to our existing businesses, placing the profitability of our assets under pressure. We expect our business to continue to be subject to the risks
and uncertainties discussed in Item 3Key InformationRisk Factors.

E. Off-Balance Sheet Arrangements

Future delivery and supply of soybean and sugarcane: amounts related to sales contracts for the future delivery and supply of soybean
and sugarcane, as described under Business-Commodity Futures Contracts, are recognized as revenue on the date of delivery. Costs of goods sold under such contracts are also recorded at the date such products are transferred, upon the
documentation of delivery and the loading of the applicable products. The terms of such contracts subject us to fines in the event that we fail to deliver the previously-committed volumes to the purchasers.

F. Tabular Disclosure of Contractual Obligations

The following table summarizes our significant contractual obligations and commitments as of June 30, 2014:



|                                     |  |                       |        |  |                 |  |        |                    |  |  |                     |  |  |       |        |  |  |  |         | 
|------------------------------------ |  | --------------------- | ------ |  | --------------- |  | ------ | ------------------ |  |  | ------------------- |  |  | ----- | ------ |  |  |  | ------- | 
|                                     |  | Maturities per period |       
|                                     |  | Less thanOne Year     |        |  | One to TwoYears |  |        | Three toFive Years |  |  | More thanFive Years |  |  | Total |       
|                                     |  | (R$ thousand)         |       
|Trade payables                       |  |                       | 8,158  |  |                 |  |       |                    |  |  |                    |  |  |       |       |  |  |  | 8,158   | 
|Derivative financial instruments     |  |                       | 204    |  |                 |  |       |                    |  |  |                    |  |  |       |       |  |  |  | 204     | 
|Loans and financing(1)               |  |                       | 62,253 |  |                 |  | 13,859 |                    |  |  | 29,539              |  |  |       | 14,511 |  |  |  | 120,162 | 
|Payable for the purchase of farms    |  |                       | 44,820 |  |                 |  |       |                    |  |  |                    |  |  |       |       |  |  |  | 44,820  | 
|Transactions with related parties(2) |  |                       |       |  |                 |  | 33,237 |                    |  |  |                    |  |  |       |       |  |  |  | 33,237  | 



|(1) | Interest on variable interest rate loans and financing has been computed considering the interest rate as of June 30, 2014. See Indebtedness and Cash and Cash Equivalents.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | See Item 7.B. Related Party Transactions.
|--- | -------------------------------------------

Payables for Purchase of Farms

The following table summarizes our outstanding balances of payables for purchase of farms as of June 30, 2014.



|                  |  |                     |        | 
|----------------- |  | ------------------- | ------ | 
|Obligation        |  | Outstanding balance |       
|                  |  | (R$ thousand)       |       
|Alto Taquari Farm |  |                     | 26,060 | 
|Nova Buriti Farm  |  |                     | 18,760 | 
|                  |  |                     |        | 
|Total             |  |                     | 44,820 | 
|                  |  |                     |        | 

G. Safe harbor

See Forward-Looking Statements.

ITEM 6DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Board of Directors

Our board of directors is responsible for establishing our overall business plan, guidelines and policies, including our long-term
strategy, and for overseeing our performance. Our board of directors is also responsible for the supervision of our executive officers.



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Pursuant to our bylaws, our board of directors consists of a minimum of five and a maximum
of nine members. Election of our directors is made at annual shareholders meetings. At the date of this Annual Report, five of our directors, namely Eduardo Elsztain, Saul Zang, Alejandro G. Elsztain, Gabriel Pablo Blasi and David Alberto
Perednik were nominated by our controlling shareholder Cresud. The members of our board are elected by the shareholders meeting for a term of approximately two years, with reelection permitted. A director must remain in office until replaced
by a successor. However, any director may be removed by the shareholders before the end of such directors term. Under Novo Mercado regulations and our bylaws, a minimum of 20% of the members of our board of directors must be
independent. However, three directors must be independent if nine members are elected to our board. Prior to taking office, our board members are required to sign an agreement to comply with the regulation of the Novo Mercado.

Our board of directors holds mandatory meetings six times a year, and may hold other meetings, as necessary. Meetings of our board of
directors are convened only if a majority of the directors are present and all board decisions are taken by a 2/3 or 3/4 majority, or by simple majority, depending on the nature of the specific matters brought to discussion in our board meetings.

Brazilian corporate law and CVM Regulation No. 282 of June 26, 1998 allow the adoption of a cumulative vote process by the
request of a number of our shareholders representing a minimum of 5% of our capital stock. Brazilian corporate law allows minority shareholders that, individually or as a group, hold at least 15% of our common shares to appoint one director, by
means of a separate vote. Brazilian corporate law does not allow for the election of a member to our board of directors, unless waived by our shareholders, if that person is an employee or senior manager of one of our competitors or has an interest
conflicting with ours.

Our board of directors is currently made up of nine members, all of whom were elected at the general
shareholders meeting held on October 29, 2013, and whose terms expire at our annual shareholders meeting in 2015. The table below sets forth the name, title and date of election of each current member of our board of directors:



|                              |  |                                        |  |                  |  |     |    | 
|----------------------------- |  | -------------------------------------- |  | ---------------- |  | --- | -- | 
|Directors                     |  | Title                                  |  | Date of election |  | Age |   
|Eduardo S. Elsztain           |  | Chairman                               |  | October 29, 2013 |  |     | 54 | 
|Robert Charles Gibbins        |  | Vice-Chairman and Independent Director |  | October 29, 2013 |  |     | 44 | 
|Alejandro G. Elsztain         |  | Director                               |  | October 29, 2013 |  |     | 48 | 
|Saul Zang                     |  | Director                               |  | October 29, 2013 |  |     | 69 | 
|Isaac Selim Sutton            |  | Independent Director                   |  | October 29, 2013 |  |     | 54 | 
|Gabriel Pablo Blasi           |  | Director                               |  | October 29, 2013 |  |     | 54 | 
|David Alberto Perednik        |  | Director                               |  | October 29, 2013 |  |     | 56 | 
|João de Almeida Sampaio Filho |  | Independent Director                   |  | October 29, 2013 |  |     | 49 | 
|Fábio Schuler Medeiros        |  | Independent Director                   |  | October 29, 2013 |  |     | 36 | 

Below is a brief biographical description of each member of our board of directors:

Eduardo S. Elsztain: Mr. Elsztain studied Economic Sciences at Universidad de Buenos Aires. He has been engaged in the real estate
business for more than twenty years. He is the Chairman of the Board of Directors of Alto Palermo S.A. (APSA), Consultores Assets Management S.A., Arcos del Gourmet S.A., Cresud S.A.C.I.F. y A., BACS Banco de Crédito &
Securitización, IRSA Inversiones y Representaciones Sociedad Anónima, Tarshop, E-Commerce Latina S.A. and Banco Hipotecario, among other companies. He is also Director of IDBD Development Corporation Ltd. He is Alejandro Gustavo
Elsztains brother.

Robert Charles Gibbins: Mr. Gibbins is our Vice-chairman. He is Chief Investment Officer and
Founder of Autonomy Capital. Prior to founding Autonomy Capital in 2003, he spent nine years as Head of Emerging Markets Proprietary Trading and as a European Government debt trader at Lehman Brothers. Mr. Gibbins started his career as a Fixed
Income and FX derivative trader at JP Morgan. In 1992, he received a B.S. in Economics from the Wharton School at the University of Pennsylvania.

Alejandro G. Elsztain: Mr. Elsztain obtained a degree in agricultural engineering from University of Buenos Aires (Universidad de
Buenos Aires). Currently he is chairman of Fibesa, chairman of Cactus Argentina, second vice-chairman of Cresud, second vice-chairman of IRSA and executive vice-chairman of Alto Palermo S.A. (APSA). He is also vice-chairman of Nuevas Fronteras and
Hoteles Argentinos. He is also director of Emprendimiento Recoleta S.A. and IDBD Development Corporation Ltd., among other companies. Alejandro G. Elsztain is brother of Eduardo S. Elsztain.

Saul Zang: Mr. Zang obtained a law degree from University of Buenos Aires (Universidad de Buenos Aires). He is a member of the
International Bar Association and the Interamerican Federation of Lawyers (Federación Interamericana de Abogados). He is a founding member of the law firm Zang, Bergel & Viñes. He is chairman of Puerto Retiro S.A., first
vice-chairman of IRSA, and vice-chairman of Alto Palermo S.A. (APSA), Fibesa S.A., and Cresud S.A.C.I.F. y A. among other companies. He is also director of Banco Hipotecario, Nuevas Fronteras S.A., IDBD Development Corporation Ltd., BACS Banco de
Crédito y Securitización S.A., Tarshop S.A., and Palermo Invest S.A., among other companies.



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Isaac Selim Sutton: Mr. Sutton holds a degree in economics from the Universidade
de São Paulo (USP). He was an executive officer at the Safra Groups holding company from 1994 to 2009, where he participated in several privatizations and investments, as well as joint ventures in several sectors. He is currently a
member of the Fiscal Council of Bardella S.A. Indústrias Mecânicas. From 1995 to 2008, he was a member of the Board of Directors, Alternate to the Chairman of the Board and Coordinator of the Audit Committee, at Aracruz Celulose S/A. He
has also served on the Boards of Bardella S/A, DPVAT S/A, Telenorte Celular, TIM Participações S/A, Veracel Celulose S/A, BR Properties S/A, Gevisa S/A and Celma S/A, and on the Fiscal Councils of TIM Sul, Têxtil Renaux and TIM
Nordeste.

Gabriel Pablo Blasi: Mr. Blasi holds a degree in business administration from the Universidad del
CEMA (Centro de Estudios Macroeconómicos Argentino) and a graduate degree in finance from the Austral University in Argentina. He started his career in 1989 at Citibank, where he was as a Senior Trader for seven years. He then
worked as treasurer at Buenos Aires Branch plc and at Lloyds Bank plc in Buenos Aires. Mr. Blasi has over 20 years of experience in investment banking and capital markets, having worked at Banco Río (BSCH). He was the manager of Rio
Valores Sociedad de Bolsa, CFO of the Carrefour Group in Argentina and of Goyaique SACIFIA and former CFO of Cresud, IRSA and Alto Palermo. He is currently CFO of Banco Hipotecário S.A.

David Alberto Perednik: Mr. Perednik obtained a degree in accounting from the University of Buenos Aires (Universidad de Buenos
Aires). He has worked for several companies such as Marifran Internacional S.A., a subsidiary of Louis Dreyfus Amateurs where he worked as Financial Manager from 1986 to 1997. He also worked as a Senior Consultant in the administration and systems
department of Deloitte & Touche from 1983 to 1986. He is also Chief Administrative Officer of Cresud, IRSA and Alto Palermo.

João de Almeida Sampaio Filho: Mr. Sampaio Filho, earned a degree in Economics from the Fundação Armando
Álvares Penteado (FAAP) in 1987 and owns farms in the states of Paraná, São Paulo and Mato Grosso. He has served as President of the National Natural Rubber Commission of the Brazilian Confederation of Agriculture (CNA) and
President of the National Rubber Sector Chamber. Nominated by President Fernando Henrique Cardoso as a member of the National Agricultural Policy Council, Mr. Sampaio was President of the Brazilian Farmers Association (SRB) between 2002
and 2007 and is currently the São Paulo State Secretary of Agriculture.

Fábio Schuler Medeiros:
Mr. Medeiros holds a degree in Veterinary Medicine from the Universidade Federal de Santa Maria, MSc and Ph. D. in Animal Production  Nutrition and Meat Quality from the Universidade Federal do Rio Grande do Sul.
Mr. Medeiros also works in the coordination of the Brazilian Angus Associations Certified Angus Beef Program, which has international accreditation of AUSQUAL, and as a consultant in Animal Production-Beef Cattle in farms.

Board Committees

Pursuant to our bylaws,
our board of directors shall elect among its members 3 directors to compose the Compensation Committee and a minimum of 3 and a maximum of 4 directors to compose the Executive Committee. In addition to these two statutory committees, our board of
directors may establish other technical or advisory committees for a specific purpose and with specific duties, which members may or may not include our directors or executive officers. Our board of directors shall establish the rules applying to
these committees, including rules on their composition, term of office, compensation and operation. Such committees are advisory and non-deliberative in nature. The following advisory committees are currently established and active:

Compensation Committee

The
Compensation Committee was established on March 1, 2012, and is composed of the following members of our board of directors, all elected on October 30, 2013 and whose terms expire at our annual shareholders meeting to be held in 2015:
(i) Alejandro G. Elsztain, (ii) Saul Zang and (iii) Isaac Selim Sutton. In accordance with our bylaws, the Compensation Committee performs consultative assistance to the Board of Directors, including with respect to the determination
of the compensation and benefits to be received by our directors and executive officers. Its activities include (i) submitting proposals to the Board of Directors with respect to director and executive officer compensation, (ii) advising
the Board of Directors with respect to the granting of stock options or subscription warrants to our officers and employees and (iii) advising the Board of Directors with respect to profit sharing plans involving our executive officers and
employees.



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Executive Committee

The Executive Committee was established on December 13, 2011, and is composed of the following members of our board of directors, all
elected on October 30, 2013 and whose terms expire at our annual shareholders meeting to be held in 2015: (i) Eduardo S. Elsztain, (ii) Alejandro G. Elsztain and (iii) Saul Zang. In accordance with our bylaws, the Executive
Committee performs consultative assistance to the Board of Directors with respect to its role as a supervisory body, advising the Board of Directors on, or periodically reviewing, certain strategic or financial aspects of our business. Its
activities include (A) advising the Board of Directors with respect to (i) our business plan, (ii) alterations to our authorized capital, (iii) strategic initiatives, our growth plan and investment initiatives and (iv) any
investments or dispositions over R$700 thousand; (B) reviewing annually (i) our financing initiatives, including with respect to our securities, (ii) the financial implications of our financing strategy and (iii) our dividend
policy; and (C) reviewing and supervising periodically (i) the necessary financing for investments or activities in excess of R$700 thousand and (ii) our accessing of the capital markets.

Executive Officers

Pursuant to
our bylaws, we must have two to six executive officers who may or may not be shareholders and must all be residents of Brazil. Our executive officers are elected by our board of directors. Currently, we have four executive officers, who hold the
following titles: chief executive officer and investor relations officer, chief administrative officer, chief operating officer and agricultural technical officer. Our executive officers are elected for a one-year term with the possibility of
reelection, and they are required to remain in office until the installation of their successors. Under Novo Mercado regulation, our executive officers are also required to sign an agreement to comply with the rules of the Novo Mercado
prior to taking office.

Our executive officers are our legal representatives and are responsible for our day-to-day management,
implementation of the policies and directives set by our board of directors and other duties assigned to them under the law and our bylaws. Our executive officers are authorized to take all actions required for the operation of our business, unless
the law or our bylaws specifically delegate such authority to the shareholders meeting or our board of directors.

The table below
indicates the name, title, date of election and term of office of each of our current executive officers:



|                                |  |                                                                                     |  |                  |  |                      |  |     |    | 
|------------------------------- |  | ----------------------------------------------------------------------------------- |  | ---------------- |  | -------------------- |  | --- | -- | 
|Executive officers              |  | Title                                                                               |  | Date of election |  | End of term ofoffice |  | Age |   
|Julio César de Toledo Piza Neto |  | Chief executive officer, principal financial officer and investor relations officer |  | October 30, 2013 |  | October 2014*        |  |     | 44 | 
|Gustavo Javier Lopez            |  | Chief administrative officer                                                        |  | October 30, 2013 |  | October 2014*        |  |     | 47 | 
|André Guillaumon                |  | Chief operating officer                                                             |  | October 30, 2013 |  | October 2014*        |  |     | 40 | 
|Mario Aguirre                   |  | Agricultural technical officer                                                      |  | October 30, 2013 |  | October 2014*        |  |     | 49 | 



|* | The officers shall remain in office until the Directors Meeting to be held after the General Shareholders Meeting at which the 2014 financial results will be submitted for approval.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Below is a brief biographical description of our executive officers: Julio César de Toledo Piza Neto: Mr. Julio
Toledo Piza graduated in Agronomy Engineering from the Escola Superior de Agricultura Luiz de Queiroz (ESALQ) of the Universidade de São Paulo at Piracicaba and has an MBA in Administration and Finance from Columbia Business
School in New York. In addition to eight years of field experience as an agronomy engineer, he has spent the last six years at McKinsey and Company in São Paulo, where he has held several senior positions.

Gustavo Javier Lopez: Mr. Lopez joined Cresud in 1999 as budget manager. Since 2004, he has served as budget manager of IRSA.
Mr. Lopez has also worked for Argentine company Estancias Unidas del Sud as its budget analyst and as accountant for Loma Negra. He received an accounting degree from the Universidad de Buenos Aires.

André Guillaumon: Mr. Guillaumon holds a bachelors degree in Agricultural Engineering from the Escola Superior de
Agricultura Luiz de Queiroz (ESALQ) at Piracicaba, Brazil. In 1996, he began his career at Fertibrás S.A., where he worked directly in preparing and implementing fertilizer production and sales strategies. Mr. Guillaumon also
represented Fertibrás S.A. in technical forums, such as the 25th International Fertilizer Management Seminar (Chicago, USA) and at the Fertilizer Quality Commission (ANDA).



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Mario Aguirre:Mr. Aguirre earned a bachelors degree in Agricultural
Engineering from Universidad Nacional del Centro de la Provincia de Buenos Aires. In 1987, he began his career at La Macedonia, chairing the agriculture and ranching businesses. In 1999, he joined Cresud, where he served as general director
of the agricultural unit. Mr. Aguirre also worked at the company La Morocha S.A. as general technical director for 12,000 hectares, and at Agroedera S.A. as general manager for the restructuring of the agricultural and ranching sector involving
12,500 hectares.

Agreements with our Directors and Executive Officers

We are not party to any agreement or obligations involving the members of our board of directors and our executive officers.

Family Relationship among our Directors and Officers

Eduardo S. Elsztain, chairman of our board of directors, is the brother of director Alejandro G. Elsztain, a member of our board of directors.

B. Compensation

Pursuant to our
bylaws, the total amount of the compensation paid to the members of our board of directors, fiscal council and executive officers, in the aggregate, is set annually at the general shareholders meeting. Our directors, pursuant to the
recommendation of the compensation committee, will allocate the aggregate compensation among our executive officers and directors. Although our executive officers are entitled to fixed compensation and a bonus depending on individual milestones and
company performance, the compensation of the board of directors and fiscal council is fixed. The bonus compensation is paid to our executive officers pursuant to annual profit sharing plans available to employees in general, including executive
officers. The profit sharing plan of the company is revised on an annual basis in order to update the criteria and milestones that will be applicable during the relevant fiscal year and approved by relevant union representatives. The plan sets forth
general and individual criteria that are based on the overall performance of the company.

The aggregate compensation paid for the 2014
fiscal year to our executive officers and members of our board and fiscal council was R$8.8 million, comprised of a fixed amount of R$3.8 million and a bonus of R$1.9 million paid to our executive officers under our annual profit sharing plan and a
bonus of R$3.0 million paid to members of our board of directors. The bonus to the board was paid based on a recommendation of our compensation committee. The fixed amount for our board of directors and fiscal council was R$718 thousand and for our
officers was R$3.1 million.

Neither we nor our subsidiaries have set aside any amount to provide pension, retirement or similar benefits.

Stock Option Plans

Our stock option
plan was approved on October 29, 2008 for the benefit of the members of our board of directors, executive officers and selected employees and our directly and indirectly controlled entities, and is limited to 2.0% of our capital stock,
including all outstanding stock options (vested and unvested). Our board of directors manages our stock option plan and grants stock options subject to the limits and restrictions of applicable regulation, our by-laws and the guidelines set forth in
the shareholders meeting that approved it. Our board of directors approved our first issuance of stock options under the plan on August 11, 2010, with options with an exercise price of R$8.97 per share, which vested on August 11,
2012 and may be exercised within three years thereafter. Our board of directors approved our second issuance of stock options under the plan on July 3, 2012, with options with an exercise price of R$8.25 per share, which vested on July 3,
2012 and may be exercised within five years thereafter. Our board of directors approved our third issuance of stock options under the plan on September 4, 2012, with options with an exercise price of R$8.52 per share, which vested on
September 4, 2014, and may be exercised within three years thereafter. As of June 30, 2014, no stock options have been exercised under either the first, second or third issuances.

C. Board Practices

For information about
the date of expiration of the current term of office and the period during which each director has served in such office, see Item 6Directors, Senior Management and EmployeesA. Directors and Senior Management.

Neither we nor any of our subsidiaries have entered into a service contract with any of our directors that provide for benefits upon
termination of employment.



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Fiscal Council

Under Brazilian corporate law, the Conselho Fiscal, or fiscal council, is a corporate body independent of our management and our
independent auditors. Its primary responsibility is monitoring management activities, reviewing our financial statements, and reporting its findings to our shareholders.

Under an exemption pursuant to Rule 10A-3 under the Exchange Act regarding the audit committees of listed companies, a fiscal council may
exercise the required duties and responsibilities of a U.S. audit committee to the extent permissible under the Brazilian corporate law.

To comply with Rule 10A-3, the fiscal council must meet certain standards, including the following: (i) it must be separate from the full
board of directors; (ii) no executive officer may be a member; and (iii) Brazilian law must set forth standards for the independence of the members. The fiscal council must also, to the extent permitted by Brazilian law, among other
things: (A) be responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls or auditing; (B) have the authority to engage independent counsel and other advisors as
it deems necessary to carry out its duties; and (C) receive appropriate funding from the company for payment of compensation to the external auditors and advisors as well as ordinary administrative expenses.

We have modified our fiscal council to comply with the exemption requirements. Accordingly, the fiscal council operates pursuant to its
charter (regimento interno), which contemplates the activities described above to the extent permitted by Brazilian law and is compliant with the requirements of the U.S. Sarbanes-Oxley Act of 2002 and the applicable regulations and requirements of
the SEC. Because Brazilian corporate law does not permit the board of directors to delegate responsibility for the appointment and removal of the external auditors and does not provide the fiscal council with the authority to resolve disagreements
between management and the external auditors regarding financial reporting, the fiscal council cannot perform these functions. However, the fiscal councils charter (regimento interno) provides the fiscal council with the authority to submit
recommendations to the board of directors for the appointment or removal of the external auditors and their compensation.

Pursuant
to our bylaws, our fiscal council is permanent. The fiscal councils members are elected at the annual shareholders meeting with a term of office that extends through the following annual shareholders meeting. Our fiscal council
shall be composed of three to five effective members and their alternates, who may or may not be shareholders. All members of our fiscal council are also required to sign an agreement to comply with the Novo Mercado rules prior to assuming
their roles.

In addition, minority shareholders representing a minimum of 10% of our voting shares are entitled to elect one
fiscal council member and his or her alternate by a separate vote. Our fiscal council may not include members of our board of directors, our executive officers, or our employees or of any subsidiary or a company under common control with us, or
spouses or close family members of our directors and officers. Brazilian corporate law requires fiscal council members to receive as remuneration of at least 10% of the average annual amount paid to our officers, which excludes benefits and other
allowances, or profit sharing, if any.

Our fiscal council is currently composed of three members and alternates.

The table below indicates the name, title, date of election and term of office of each current member of our fiscal council:



|                             |  |                                 |  |                  |  |                   
|---------------------------- |  | ------------------------------- |  | ---------------- |  | ------------------
|Fiscal Council Members       |  | Position                        |  | Date of Election |  | End of office term
|                             |  |                                 | 
|Fabiano Nunes Ferrari        |  | Fiscal Council member           |  | October 27, 2014 |  | October 2015      
|                             |  |                                 | 
|Daniela Gadben               |  | Fiscal Council alternate member |  | October 27, 2014 |  | October 2015      
|                             |  |                                 | 
|Gabriel Herscovici Junqueira |  | Fiscal Council member           |  | October 27, 2014 |  | October 2015      
|                             |  |                                 | 
|Ivan Luvisotto Alexandre     |  | Fiscal Council alternate member |  | October 27, 2014 |  | October 2015      
|                             |  |                                 | 
|Débora de Souza Morsch       |  | Fiscal Council member           |  | October 27, 2014 |  | October 2015      
|                             |  |                                 | 
|Marcelo Cruvinel Petto       |  | Fiscal Council alternate member |  | October 27, 2014 |  | October 2015      



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Below is a brief biography of each member and alternate member of our fiscal council:

Fabiano Nunes Ferrari holds a law degree from the Pontifícia Universidade Católica de São Paulo (PUC-SP), a
specialist degree in Corporate Law from the Pontifícia Universidade Católica de São Paulo (PUC-SP) and is a partner at Suchodolski Advogados Associados law firm in São Paulo, specialized in the fields of corporate
law, international law, foreign investments, mergers and acquisitions and contracts. In the corporate law area, he has worked in several takeovers of companies and/or assets, due diligences, shareholders agreements, joint ventures and
corporate restructuring. Formerly a lawyer at the Bryan Cave LLP law firm in New York. Also a member of the International Bar Association.

Daniela Gadben holds a law degree from the Universidade de São Paulo (USP) and a LLM degree from the London School of
Economics and Political Science (LSE). Ms. Gadben is an attorney at Suchodolski Advogados Associados law firm in São Paulo, acting in the fields of corporate law and international law.

Gabriel Herscovici Junqueira holds a law degree and a Master of Civil Procedural Law degree from the Universidade de São
Paulo (USP). Mr. Junqueira is an associate attorney at Suchodolski Advogados Associados law firm in São Paulo, specialized in the fields of international law, corporate law, civil law and litigation with emphasis on alternative
dispute resolution techniques. Also serves as arbitrator at ArbitraNet.

Ivan Luvisotto Alexandre holds a Law degree from
the Universidade de São Paulo (USP), a specialist degree in Accountability applied to Law from the Fundação Getúlio Vargas in São Paulo (FGV-SP), as well as a specialist degree in Information
Technology Law from the Fundação Getúlio Vargas in São Paulo (FGV-SP). As a partner at Suchodolski Advogados Associados law firm in São Paulo, with extensive experience in corporate planning and consultancy,
M&As, international agreements and transactions, he has assisted Brazilian and foreign companies in structuring their investments in Brazil and abroad. He is also the Legal Director of the Brazil-Israel Chamber of Commerce and Industry since
2010.

Débora de Souza Morsch graduated in Civil Engineering and Administration from Universidade Federal do Rio
Grande do Sul (UFRGS). Ms. Morsch has a specialist degree in Capital Markets from Associação dos Analistas e Profissionais de Investimento do Mercado de Capitais (Apimec-UFRGS) and in Construction Management from UFRGS.
Ms. Morsch is a partner and diretor at Zenith Asset Management and at SOLIDUS S/A CCVM and has been a member of the board of Electro Aço Altona S/A and a member of the fiscal council of Encorpar S/A.

Marcelo Cruvinel Petto graduated in Agronomy Engineering from the Escola Superior de Agricultura Luiz de Queiroz (ESALQ) of the
Universidade de São Paulo at Piracicaba and has a specialist degree in Administration from Fundação Getúlio Vargas in São Paulo (FGV-SP). In 1996, he began his career at Bolsa de Mercadorias&
Futuro (BM&F), where he worked as a trainee. Mr. Petto also worked at Credit Suisse Hedging Griffo S.A., Agrifirma Brasil Agropecuária Ltda. and Banco Original S.A. (previous Banco JBS S.A.), where he held several senior
positions.

For information about the compensation committee, see Item 6Directors, Senior Management and
EmployeesDirectors and Senior Management.

D. Employees

The tables below show the evolution in our total number of our employees from 2012 to 2014:



|                       |  |                                          |     |  |      |  |     |      |  |  |     | 
|---------------------- |  | ---------------------------------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                       |  | Number of in-house employees at June 30, |    
|Location               |  | 2012                                     |     |  | 2013 |  |     | 2014 | 
|Head Offices/São Paulo |  |                                          | 42  |  |      |  | 51  |      |  |  | 47  | 
|Cremaq Farm            |  |                                          | 32  |  |      |  | 38  |      |  |  | 34  | 
|Araucária Farm         |  |                                          | 10  |  |      |  | 12  |      |  |  | 12  | 
|Alto Taquari Farm      |  |                                          | 5   |  |      |  | 4   |      |  |  | 4   | 
|Chaparral Farm         |  |                                          | 14  |  |      |  | 66  |      |  |  | 81  | 
|Nova Buriti Farm       |  |                                          | 3   |  |      |  | 3   |      |  |  | 3   | 
|Jatobá Farm            |  |                                          | 9   |  |      |  | 19  |      |  |  | 43  | 
|Preferência Farm       |  |                                          | 6   |  |      |  | 14  |      |  |  | 11  | 
|Horizontina Farm       |  |                                          | 10  |  |      |  | 12  |      |  |  |    | 
|Partnership I          |  |                                          | 6   |  |      |  | 10  |      |  |  | 5   | 
|Avarandado             |  |                                          |    |  |      |  |    |      |  |  | 8   | 
|                       |  |                                          |     |  |      |  |     |      |  |  |     | 
|Total                  |  |                                          | 137 |  |      |  | 229 |      |  |  | 248 | 



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|             |  |                                                              |    |  |      |  |     |      |  |  |     | 
|------------ |  | ------------------------------------------------------------ | -- |  | ---- |  | --- | ---- |  |  | --- | 
|             |  | Number of third-party service provider employees on June 30, |   
|Location     |  | 2012                                                         |    |  | 2013 |  |     | 2014 | 
|Goiás        |  |                                                              | 10 |  |      |  | 12  |      |  |  | 12  | 
|Mato Grosso  |  |                                                              | 5  |  |      |  | 4   |      |  |  | 4   | 
|Bahia        |  |                                                              | 35 |  |      |  | 109 |      |  |  | 140 | 
|Piauí        |  |                                                              | 32 |  |      |  | 38  |      |  |  | 42  | 
|Maranhão     |  |                                                              | 10 |  |      |  | 12  |      |  |  | 0   | 
|Minas Gerais |  |                                                              | 3  |  |      |  | 3   |      |  |  | 3   | 
|             |  |                                                              |    |  |      |  |     |      |  |  |     | 
|Total        |  |                                                              | 95 |  |      |  | 178 |      |  |  | 201 | 

All of our employees are located in Brazil, and we do not employ a material number of temporary employees.

Compensation and benefits

Our compensation policy for our employees is based on legal and market rates of compensation, as well as merit-based increases in
individual employees compensation, based on individual goals set for such employees and administered and monitored by our human resources department. We are also party to agreements, entered into with unions representing our employees,
providing for employee profit-sharing arrangements (programa de participação nos resultados), pursuant to which all of our employees receive annual bonuses based on our financial and operating results, as well as personal goals
set for individual employees. Finally, we also seek to retain quality personnel through offering benefits such as health and dental care, life insurance, meal vouchers, transportation and lodging, as well as job and technical training and subsidies
for post-graduate, business administration and language courses. We also employ security officers at each of our agricultural properties, in an effort to maintain safe working conditions for employees contracted through our third-party service
providers, including through regular workplace safety training programs.

Relationship with unions

We believe that we have good relationships with our employees and the unions that represent them. We maintain relations with the several
regional and local chapters of unions in the regions in which we operate, including the Union of the Workers for Real Estate Companies, São Paulo (Sindicato dos Empregados em Empresas de Compra Venda, Locação,
Administração de Imóveis Residenciais e Comerciais de São Paulo, or SEECOVI), the Rural Workers Union (Sindicato dos Trabalhadores Rurais) in various states including Bahia, Piauí, Minas Gerais,
Mato Grosso and Maranhão and the Federation of Agricultural Workers (Federação dos Trabalhadores na Agricultura) in Piauí and Bahia. As of the date of this Annual Report, 100% of our employees were represented by
unions. The table below summarizes the agreements entered into between us and the unions representing our employees as of June 30, 2014.



|               |  |                                               |  |                                             |  |                         
|-------------- |  | --------------------------------------------- |  | ------------------------------------------- |  | ------------------------
|Branch Office  |  | Union                                         |  | Agreement(s)                                |  | AgreementExpiration Date
|Head Office    |  | SEECOVI(1)                                    |  | Profit Sharing Program(4) Banco de horas(3) |  | 06/30/2015
06/30/2015   
|Cremaq         |  | Sind. Trab. Rurais de Baixa Grande do Ribeiro |  | Profit Sharing Program Banco de horas       |  | 06/30/2015
04/12/2014   
|Chaparral      |  | FETAG-BA(2)                                   |  | Profit Sharing Program Banco de horas       |  | 08/22/201408/22/2014    
|Jatobá         |  | FETAG-BA                                      |  | Profit Sharing Program Banco de horas       |  | 08/22/201408/22/2014    
|Partnership I  |  | FETAG-BA                                      |  | Profit Sharing Program Banco de horas       |  | 08/22/201408/22/2014    
|Preferência    |  | FETAG-BA                                      |  | Profit Sharing Program Banco de horas       |  | 08/22/201408/22/2014    
|Partnership II |  | Sind. Trab. Rurais de Baixa Grande do Ribeiro |  | Profit Sharing Program Banco de horas       |  | 06/30/201504/12/2014    



|(1) | Union of the Workers for Real Estate Companies, São Paulo (Sindicato dos Empregados em Empresas de Compra Venda Locação Administração de Imóveis Residenciais e Comerciais de
São Paulo, or SEECOVI).
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | State of Bahia Federation of Agricultural Workers (Federação dos Trabalhadores Agricultura do Estado da Bahia, or FETAG-BA).
|--- | ----------------------------------------------------------------------------------------------------------------------------

|(3) | Refers to overtime compensation in accordance with Brazilian law.
|--- | -----------------------------------------------------------------

|(4) | Programa de Participação nos Resultados.
|--- | ----------------------------------------



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E. Share Ownership

The following table indicates the number of our common shares and stock options directly held by each of our directors and executive officers
as of September 30, 2014.



|                                |  |                        |            |  |                                        |  |            | 
|------------------------------- |  | ---------------------- | ---------- |  | -------------------------------------- |  | ---------- | 
|Name                            |  | Number ofCommon Shares |            |  | Stock Options awardedand not exercised | 
|Julio Cesar de Toledo Piza Neto |  |                        | 500        |  |                                        |  | 292,113(1) | 
|Gustavo Javier Lopez            |  |                        | 0          |  |                                        |  | 177,213(2) | 
|André Guillaumon                |  |                        | 0          |  |                                        |  | 177,213(2) | 
|Mario Enrique Aguirre           |  |                        | 0          |  |                                        |  | 177,213(2) | 
|Eduardo S. Elsztain(3)          |  |                        | 23,429,249 |  |                                        |  | 0          | 
|Robert Charles Gibbins          |  |                        | 2,431,500  |  |                                        |  | 0          | 
|Alejandro G. Elsztain           |  |                        | 100        |  |                                        |  | 0          | 
|Saul Zang                       |  |                        | 100        |  |                                        |  | 0          | 
|Isaac Selim Sutton              |  |                        | 100        |  |                                        |  | 0          | 
|Gabriel Pablo Blasi             |  |                        | 100        |  |                                        |  | 0          | 
|João de Almeida Sampaio Filho   |  |                        | 100        |  |                                        |  | 0          | 



|(1) | 97,371 of the options have an exercise price of R$8.97 per share and expire on August 11, 2015. 97,371 of the options have an exercise price of R$8.25 per share and expire on July 3, 2017. 97,371 of the
options have an exercise price of R$8.52 per share and expire on September 4, 2017.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | 68,159 of the options have an exercise price of R$8.97 per share and expire on August 11, 2015. 54,527 of the options have an exercise price of R$8.25 per share and expire on July 3, 2017. 54,527 of the
options have an exercise price of R$8.52 per share and expire on September 4, 2017.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes shares held of record by Cresud and Agro Investment. See Item 7Major Shareholders and Related Party Transactions.
|--- | -----------------------------------------------------------------------------------------------------------------------------

For information about our Stock Option Plan, see Item 6Directors, Senior Management and EmployeesCompensation-Stock Option
Plans.

ITEM 7MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The table below sets forth information relating to the ownership of our common shares as of September 30, 2014.



|                                                         |  |                       |            |  |               |  |       |                                              |  |  |                                      |  |  |  |       | 
|-------------------------------------------------------- |  | --------------------- | ---------- |  | ------------- |  | ----- | -------------------------------------------- |  |  | ------------------------------------ |  |  |  | ----- | 
|Shareholder                                              |  | Number ofCommonShares |            |  | Percentage(%) |  |       | Number ofCommon Shares(includingwarrants)(5) |  |  | Percentage(%) (includingwarrants)(5) | 
|Cresud(1)                                                |  |                       | 23,150,050 |  |               |  | 39.63 |                                              |  |  | 33,248,681                           |  |  |  | 45.53 | 
|Agro Investment and Agro Managers(2)                     |  |                       | 160,750    |  |               |  | 0.28  |                                              |  |  | 853,974                              |  |  |  | 1.14  | 
|J. P. Morgan Whitefriars(3)                              |  |                       | 4,408,000  |  |               |  | 7.55  |                                              |  |  | 4,408,000                            |  |  |  | 6.04  | 
|Elie Horn(4)                                             |  |                       | 3,274,600  |  |               |  | 5.61  |                                              |  |  | 6,296,000                            |  |  |  | 9.48  | 
|Elie Horn                                                |  |                       | 634,300    |  |               |  | 1.09  |                                              |  |  | 634,300                              |  |  |  | 0.87  | 
|Cape Town LLC                                            |  |                       | 2,640,300  |  |               |  | 4.52  |                                              |  |  | 6,291,700                            |  |  |  | 8.62  | 
|Directors and Officers (other than Mr. Eduardo Elsztain) |  |                       | 2,432,000  |  |               |  | 4.16  |                                              |  |  | 2,432,000                            |  |  |  | 3.33  | 
|Treasury                                                 |  |                       | 195,800    |  |               |  | 0.34  |                                              |  |  | 195,800                              |  |  |  | 0.27  | 
|Others                                                   |  |                       | 24,801,200 |  |               |  | 42.45 |                                              |  |  | 24,801,200                           |  |  |  | 33.96 | 
|Total                                                    |  |                       | 58,422,400 |  |               |  | 100.0 |                                              |  |  | 73,028,000                           |  |  |  | 100.0 | 



|(1) | As of September 30, 2014, Mr. Eduardo S. Elsztain is the beneficial owner of 37.94% of IFIS Limited, which owns 100% of the capital stock of IFISA, which holds 39,15% of the capital stock of Cresud on a
fully diluted basis. Because of his ownership interest in IFIS Limited and IFISA, Mr. Eduardo Elsztain may appoint the majority of our board of directors and the board of directors of Cresud, as well as determine the substantive outcome of all
decisions requiring shareholder approval with respect to Cresud. Accordingly, Mr. Elsztain may be deemed to beneficially own the shares held by Cresud and hold the sole voting and dispositive power with respect to these shares.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Includes 19,300 shares held by Agro Investment, a company controlled by Cresuds controlling shareholder (Mr. Eduardo Elsztain) and 141,450 shares held by Agro Managers, a company jointly owned by Cresud (46.84%),
and a number of Cresuds employees-as a result of which Mr. Eduardo Elsztain may be deemed to hold the sole voting and dispositive power with respect to the shares held of record by Agro Investment, and Cresud may be deemed to hold the
sole voting and dispositive power with respect to the shares held of record by Agro Manager.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Such shares were acquired and are held as a hedge for a total return swap transaction involving the same number of our common shares entered into between J.P. Morgan Chase Bank, N.A., an affiliate of J.P. Morgan
Whitefriars Inc., and Autonomy Master Fund Limited. Autonomy Master Fund Limited is controlled by Autonomy Capital (Jersey) LP, which is managed by Robert Gibbins, a member of our board of directors. The swap transaction matures on January 20,
2015. Under the swap transaction, J.P. Morgan Whitefriars controls the sole power to vote and to dispose of the shares. J.P. Morgan Whitefriars is controlled by J.P. Morgan Chase & Co., a publicly held company.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Includes shares held by Elie Horn and Cape Town LLC. Elie Horn is the principal shareholder of Cape Town LLC.
|--- | -------------------------------------------------------------------------------------------------------------

|(5) | Gives effect to the potential issuance of 14,606,000 common shares in connection with the 256,000 first issuance warrants that may be exercised within sixty days from September 30, 2014. All warrants are held by
our major shareholders. See Item 10Additional InformationDescription of Outstanding Warrants.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Our controlling and major sharehodlers do not have different voting rights.

Controlling Shareholder

Cresud

Cresud was organized in December 1936 under the laws of Argentina. Cresuds principal operating activities consist of the
acquisition, development and sale of agricultural properties in Argentina, and the production of agricultural products. Its shares are listed on the Buenos Aires Stock Exchange (Bolsa de Comércio de Buenos Aires) and on the Nasdaq
(under the symbol CRESY).

As of September 30, 2014, Mr. Eduardo S. Elsztain is the beneficial owner of 37.94% of
IFIS Limited, which owns 100% of the capital stock of IFISA, which holds 39.15%of the capital stock of Cresud on a fully diluted basis. Because of his ownership interest in IFIS Limited and IFISA, Mr. Eduardo Elsztain may appoint the majority
of our board of directors and the board of directors of Cresud, as well as determine the substantive outcome of all decisions requiring shareholder approval with respect to Cresud.

As a result of Cresuds ownership interest in us, conflicts of interest could arise with respect to transactions involving our ongoing
business activities, and the resolution of these conflicts may not be favorable to us. Specifically, business opportunities, including but not limited to potential targets for rural property acquisitions may be attractive to both Cresud and us. In
addition, five out of nine of our directors have been nominated by Cresud. This situation may give rise to conflicts of interest. We may not be able to resolve any potential conflicts and, even if we do so, the resolution may be less favorable to us
than if we were dealing with an unaffiliated party.

Other Major Shareholders

Elie Horn and Cape Town LLC

Elie Horn is the sole shareholder of E.H. Capital Management Ltd., which is the principal shareholder of Cape Town LLC, a company organized
under the laws of the State of Delaware. Elie Horn is the president and controlling shareholder of Cyrela Brazil Realty S.A., and has more than 40 years of experience in constructing and management of commercial buildings in São Paulo and Rio
de Janeiro, Brazil, as well as in selling and leasing luxury and high-technology business offices, and finally, to a lesser extent, in the leasing and management of shopping malls. In recent years, Mr. Horn has also been involved in the
development of residential condominiums. Mr. Horn previously served as a member of our board of directors, elected at the general shareholders meeting held on October 27, 2011, and retired from the board on July 3, 2012.

Agro Investment and Agro Managers

Agro Investment and Agro Managers are companies organized under the laws of Argentina, controlled by Cresuds controlling shareholder (Mr.
Eduardo Elsztain) and certain of Cresuds employees. Agro Investment and Agro Managers hold 0.28% of our shares and 4.62% of our warrants.

JP Morgan Whitefriars Inc.

JP Morgan Whitefriars Inc. is a company with its principal place of business in England, United Kingdom and is controlled by J.P. Morgan
Chase & Co.

J.P. Morgan Chase Bank, N.A. entered into a total return and swap, involving 4,408,000 of our common shares
(representing 7.55% of our capital stock), with Autonomy Master Fund Limited. J.P. Morgan Whitefriars Inc., acting on behalf of J.P. Morgan Chase Bank, N.A., acquired 4,408,000 of our common shares as a hedge for such transaction. Under the
swap, Autonomy Master Fund Limited pays J.P. Morgan Whitefriars Inc. a quarterly financing charge which varies based on a floating interest rate and is offset by any dividend payments J.P. Morgan Whitefriars Inc. may have received thereon. Autonomy
Master Fund Limited is controlled by Autonomy Capital (Jersey) LLP, which is controlled by Robert Gibbins, a member of our board of directors. Neither J.P. Morgan Chase Bank, N.A., J.P. Morgan Whitefriars Inc., nor any of their affiliates have
exercised any voting rights with respect to the 4,408,000 shares acquired.



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Changes in Share Ownership

Sale of our Common Shares by Credit Suisse Hedging-Griffo

On December 2, 2011, Credit Suisse Hedging-Giffro, or Griffo, sold 3,785,765 of our common shares through the BM&FBOVESPA. Prior to
the sale, Griffo held 4,656,265, or 7.96 % of our outstanding common shares. After the sale, it now holds 870,500, or 1.49 % of our outstanding common shares.

Purchase of our Common Shares by Tradewinds Global Investors, LLC

On December 7, 2011, Tradewinds Global Investors, LLC, or Tradewinds, bought 9,613,500 of our common shares through the BM&FBOVESPA.
Prior to the purchase, Tradewinds held 3,012,200, or 5.15 % of our outstanding common shares. After such purchase, it now holds 9,613,500, or 16.46 % of our outstanding common shares.

Sales of our Common Shares by Tradewinds Global Investors, LLC

On March 30, 2012, Tradewinds sold 3,243,800 of our common shares through the BM&FBOVESPA. Prior to the sale, Tradewinds held
9,613,500, or 16.46 % of our outstanding common shares. After the sale, it now holds 6,369,700, or 10.90 % of our outstanding common shares.

On July 9, 2012, Tradewinds sold 2,966,100 of our common shares through the BM&FBOVESPA. Prior to the sale, Tradewinds held
6,369,700, or 10.90 % of our outstanding common shares. After the sale, it now holds 3,403,600, or 5.82 % of our outstanding common shares.

On August 22, 2012, Tradewinds sold 584,200 of our common shares through the BM&FBOVESPA. Prior to the sale, Tradewinds held
3,403,600, or 5.82% of our outstanding common shares. After the sale, it now holds 2,819,400, or 4.83 % of our outstanding common shares.

Purchase of our Common Shares by Banco Fator

On April 15, 2013, Banco Fator bought 1,090,800 of our common shares through the BM&FBOVESPA. Prior to the acquisition, Fator held
1,995,700, or 3.42% of our outstanding common shares. After the acquisition, it now holds 3,086,500, or 5.28 % of our outstanding common shares.

Sale of our Common Shares by Banco Fator

On February 14, 2014, Banco Fator S.A. sold 670,000 of our common shares through the BM&FBOVESPA. Prior to the sale, Banco Fator S.A.
held 3,257,800, or 5.58% of our outstanding common shares. After the sale, it now holds 2,587,800, or 4.43% of our outstanding common shares.

ADRs

9,349,564 shares representing ADRs are held in the United States by one holder of record.

B. Related Party Transactions

We
adhere to the corporate governance practices recommended and required under applicable law, including under the rules and regulations of the Novo Mercado and the BM&FBOVESPA and Brazilian corporate law.

Decisions made regarding our operations are supervised by our board of directors and fiscal council in accordance with our bylaws and
applicable law. Our bylaws provide that provision of services and consulting contracts entered into among us or our affiliates, on the one hand, and shareholders that, individually or in the aggregate, own at least 10% of our capital stock shall be
submitted by our board of directors for the approval of our general shareholders meeting.



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Contracts entered into with related parties are negotiated individually and are analyzed in
comparison with the market conditions of the applicable region. Along these lines, all transactions entered into with related parties should be documented, including their principal terms such as price, term limit, interest rates, and the respective
rights and obligations of the parties, and such terms should be consistent with those prevailing in the market.

We, our
shareholders, our directors and officers, and the members of our fiscal council, when active, should submit to arbitration for any dispute relating to the application, legality, effectiveness, interpretation, violation and effects of violation of
the provisions in the agreement for participation in the Novo Mercado listing segment, and to the Novo Mercado listing rules, the arbitration regulation instituted by the BM&FBOVESPA, the provisions of Brazilian corporate law, our
bylaws, the rules of the CMN and the Central Bank, the regulations of the CVM and the BM&FBOVESPA and other rules generally applying to the Brazilian capital markets. Any such dispute should be settled by arbitration carried out before
BM&FBOVESPA Arbitration Chamber.

According to Chapter 12 of these Rules, the parties may consent to agree to use another
arbitration chamber or forum to resolve their disputes.

Cresca Acquisition

Purchase of interest in joint venture, debts and advisory contract with Cresca S.A.

On December 12, 2013, Brasilagro executed contracts with Cresud for: (i) the acquisition of 50% interest in Cresca S.A, (ii) the
assumption of Cresud credits from Cresca, and (iii) the acquisition of an advisory contract through which Cresud committed to render services in the forest agricultural exploration to Cresca in exchange for payments of fees.

Cresca is a company exploring the agricultural activity, which invests in agricultural and cattle raising land in Paraguay. At the purchase
date it owned approximately 81,000 hectares and a contract which assured the right to purchase approximately 61,000 additional hectares of agricultural land in the region of Mariscal Estigarribia in Paraguay. The purchase of 61,000 hectares shall
occur according to the contractual terms upon the payment of the purchase price by Cresca, when the owner of the land (the other investor in Cresca) shall transfer the ownership of the land. On July 9, 2014, 30,500 hectares were purchased, and
the remaining 30,500 hectares shall be purchased until December 9, 2014.

On April 07, 2014, Cresca sold 24,624 of undeveloped
hectares. After this transaction, Cresca owns 117,331 hectares, of which approximately 60,000 hectares are suitable for agricultural purposes.

For more information, see Note 33 to the financial statements included in this Annual Report on Form 20-F.

C. Interests of experts and counsel

Not
applicable.

ITEM 8FINANCIAL INFORMATION

A. Consolidated Statements and Other Financial Information

See Item 18Financial Statements below.

Legal Proceedings

We and our
subsidiaries are subject to legal and administrative proceedings involving environmental, labor, civil, tax and criminal matters. As of June 30, 2014, we were plaintiffs or defendants in 79 pending legal and administrative proceedings, of which
4 are environmental proceedings, 43 are labor proceedings, 7 are tax proceedings and 25 are civil proceedings.

As of June 30, 2014,
we maintain total provisions of R$3.6 million corresponding to probable losses. We believe that our provisions for contingencies are sufficient to cover probable losses that may result from the proceedings to which our Company and our subsidiaries
are parties, based on the opinion of our counsels. Our provisions are currently allocated to our labor proceedings. We do not expect probable losses to result from our civil, tax and criminal proceedings currently in progress.



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Among our legal and administrative proceedings as of June 30, 2014, we have identified the
following material contingencies in view of the adverse effects that could eventually affect our activities and/or the amount involved in the claims (we considered material for this purpose all legal and administrative proceedings involving amounts
exceeding R$500,000).

Civil Proceedings

We are defendants in a civil claim filed on June 10, 2009 by Mr. José Pereira de Souza and others in the Judicial District
Court of Correntina, State of Bahia, for the annulment of the deed of sale and purchase of agricultural property executed by and among our Company and others. We have filed our defense and await the decision. The total amount involved in the claim
is R$2.7 million and our chance of loss is estimated as possible. If we are unsuccessful we could be required to relinquish the equivalent of 2,561,681 hectares of land corresponding to 6.9% of the total area of Chaparral farm. We have not made any
provision in connection with this proceeding.

We are co-defendants in an action for damages brought on March 14, 2013 by Liliana
Marchio Silva, widow of Hailton Paz da Silva, who died in a car accident on August 29, 2011 involving a truck used by one of our service providers for the cutting, loading and transportation of sugar-cane produced in our Araucaria farm. We
filed our defense on March 19, 2013 and we are awaiting for a decision so that evidence can be presented by the parties. The total amount involved in the suit, as claimed by the plaintiff, is R$1.11 million and our chances of loss have been
classified as possible. We have not made any provision in connection with this proceeding.

Our subsidiary Imobiliária Ceibo Ltda
is a defendant in a real estate claim brought in November 2012 before the judicial district of Tasso Fragoso, State of Maranhão, by Alarico Pereira de Castro and his wife. The plaintiffs claim ownership of 313 hectares of land, allegedly held
under the record No. 296 of the Real Estate Registry Office of Tasso Fragoso, claimed to be located within the perimeter of Fazenda Horizontina Leste I and II. Our defense was filed on February 15, 2013, affirming that (i) the record
No. 296 held by the plaintiffs is null and (ii) Imobiliária Ceibo Ltda and its predecessors have exercised possession and domain for decades in the area claimed by the plaintiffs (which also supports a subsidiary defense thesis of
adverse possession by Imobiliária Ceibo Ltda). The suit is awaiting for trial and our chances of loss have been classified as remote. We have not made any provision in connection with this proceeding.

In addition, our subsidiary Imobiliária Ceibo Ltda is a defendant in a lawsuit that seeks annulment of a legal act, filed in February
2013 before the judicial district of Tasso Fragoso, State of Maranhão, by Romulo Chaves Molina and his wife. The plaintiffs claim they own 948 hectares of land, which would be superimposed on the Fazenda Horizontina Leste III. They also claim
that Fazenda Horizontina Leste I, II and III had their area increased after the georeferencing process in approximately 3,303 hectares without administrative approval. The trial court has suspended title to the deeds of Fazenda Horizontina Leste I,
II and III. In March 2013, the plaintiffs filed lawsuit seeking the (i) annulment of a certification by INCRA and (ii) the cancelation of the recorded deeds to Fazenda Horizontina Leste I, II and III. Proper defense was filed and the case
is pending. Our chances of loss have been classified as remote. We have not made any provision in connection with this proceeding.

In
April 2014, Brasilagro was summoned in suits for damages filed by Lindeval Ribeiro do Bonfim. The plaintiff claims repair for alleged material and moral damages, loss of profits, life alimony support and esthetical damages arising from labor
accident occurred at Cremaq Farm. We presented a plea for the case files to be remitted to the Labor Judge. The chances of loss were classified as possible. The amount of the suit is R$3.7 million. We have not made any provision in connection with
this proceeding.

Taxation Proceedings

On June 30, 2014, the Company, supported by the opinion of external legal advisors, recorded provision for tax contingencies in the amount
of R$2.4 million. The amount of R$2.1 million refers, particularly, to the alleged incidence of social contributions on the payments made to foreign counselors of the Company, and the balance of R$0.3 million refers to tax administrative procedures
challenging, particularly, matters related to the incidence of ICMS in operations at Araucária Farm, State of Goiás. These proceedings were assessed as probable losses and their amounts provisioned.



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On June 30, 2014, the Company has judicial and tax administrative claims in the amount of
R$8.5 million mainly related to proceedings whose merit is related to: (i) demonstration of noncompliance aiming to reform the decision order which has partially approved the credit of negative balance of income tax related to the 4th quarter of 2007 and, as a consequence, has not approved offsets carried out by the Company relating to such credits; (ii) Annulment action filed aiming to the annulment of tax credit related to
monthly estimates of IRPJ and CSLL for the period of January 2012; (iii) Notice of infraction drafted aiming to the collection of tax credit related to ICMS levying on products exported by the Company; (iv) Notice of Infraction drafted
aiming to the collection of tax credit; (v) Notice of Infraction drafted aiming to the collection of tax credit related to ICMS, in the total amount of R$198, to the understanding that the Company would not have reversed ICMS credit arising
from the bookkeeping allegedly undue of credits related to the acquisition of assets for the Companys fixed assets, since it would not have provided the preparation of CIAP book model C, related to the period from January 1 to
December 31, 2012; (vi) Notice of Infraction drafted aiming to the collection of tax credit of ICMS, to the understanding that the Company would have remitted primary products to exporter companies with the specific purpose of export,
alleging that such products would not have been remitted abroad in the period of 180 days from the shipment of goods. These proceedings were assessed as possible losses and their amounts have not been provisioned.

Labor Proceedings

In June of 2011, our Chaparral Farm was inspected by the Group of Mobile Inspection of the Ministry of Labor and Employment. The inspection
resulted in 33 infraction notices against us alleging labor practices allegedly committed by two of our third party service-providers, which we hired in connection with soil preparation on our farm. Such infractions related to labor rules with
respect to security, medicine, hygiene and health. A report was also prepared based on such inspection, alleging that the employees of our third-party service providers were subject to degrading labor conditions. We contested such allegations in the
respective administrative proceedings; however, in June 2012, these 33 infraction notices and report were considered valid by the Ministry of Labor and Employment, and we were charged with administrative penalties totaling R$132.8 thousand as of
June 30, 2012. We filed claims in labor courts in Brazil and made a judicial deposit of these penalty amounts. On August 14, 2012, a trial judgment was rendered declaring 32 out of these 33 infraction notices and report null and void. The
one claim that was considered valid by the trial judgment related solely to alleged safety issues relating to the recycling and reutilization of empty bottles and other packages of pesticides. As a result of this one claim, R$3.2 thousand of the
total amount deposited with courts will become due and payable. As part of the trial judgment, the Ministry of Labor and Employment was prohibited from registering us in the registry of companies that subject workers to degrading labor conditions
and from recording the fines relating to the infraction notices declared null and void as obligations in the books and records of the Brazilian Federal Government. The Brazilian Office of the Solicitor-General, representing the interest of the
Ministry of Labor and Employment, appealed the trial judgment on October 10, 2012. After our defense, which was timely presented, the appeal was dismissed, maintaining the decision that annuled 32 of the 33 violation notices against us.
However, on July 17, 2013, the Solicitor-General appealed to the Superior Labor Court and the appeal was not accepted. The Labor Public Prosecution Office filed an Interlocutory Appeal on September 2, 2013, which is awaiting for trial. If
such appeal is successful, in addition to the monetary amount that has already been deposited, we could have such infraction registered and published by the Ministry of Labor and Employment in its registry of companies that subject workers to
degrading labor conditions. If we were added to such registry of companies, various government agencies and financial institutions would receive notification, including BNDES and Banco do Nordeste do Brasil S/A, which would in turn makes us
ineligible to draw down financing disbursements from the credit facilities that we have obtained directly or indirectly from such government agencies, and would also constitute an event of default under such credit facilities. Our chances of loss
have been classified as remote. We have not made any provision in connection with this proceeding.

We are subject to an investigation on
the part of the public prosecutor from the Ministry of Labor of the State of Piaui for executing employment contracts with outsourced service providers. The investigation pertains to the validity of such contracts, which may be alleged to be invalid
on the grounds that the activities performed constituted aspects of our core business, which under Brazilian law may not be outsourced to third-party service providers. The investigation began on April 26, 2011, since which date we have had two
hearings with the public prosecutor. We await the conclusion of the investigation, upon which the public prosecutor may dismiss the case, propose the execution of a Conduct Adjustment Agreement or file a public civil action against us. We have not
made any provision in connection with this investigation, since there is no specific monetary claim in connection thereto.

We are subject
to an investigation on the part of the public prosecutor from the Ministry of Labor of the State of São Paulo for executing employment contracts with outsourced service providers. The investigation pertains to the validity of such contracts,
which may be alleged to be invalid on the grounds that the activities performed constituted aspects of our core business, which under Brazilian law may not be outsourced to third-party service providers. We have had two hearings with the public
prosecutor. We await the conclusion of the investigation, upon which the public prosecutor may dismiss the case, propose the execution of a Conduct Adjustment Agreement or file a public civil action against us. We have not made any provision in
connection with this investigation, since there is no specific monetary claim in connection thereto.



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Environmental Proceedings

We are defendants in an environmental administrative claim filed on November 25, 2009 by the Environmental Protection Board for the
Brazilian Institute for the Environment and Natural Renewable Resources (IBAMA) involving the total historical amount of R$3.2 million and a total amount of R$4.0 million as of June 30, 2013, under the argument that we have deforested a
permanent preservation area. The IBAMA notified us on October 8, 2012 that it had rejected our defense. In October 2012, we filed an appeal to this decision, which was also rejected, and we transferred R$2.4 million to the court deposit. We
expect to file lawsuit against IBAMA aiming to cancel the infraction notice which originated the debt. On September 13, 2013, we filed a lawsuit before the federal courts of Goiás, for annulment of the infraction notice and cancellation
of the fine. On October 15, 2013, we placed a court deposit on the amount equivalent to the fine imposed, in order to obtain the granting of injunction relief to suspend the payment of the fine until the end of the lawsuit. Due to the placement
of the court deposit, the payment of the fine is suspended until final judgment in the case. Considering there has been an unfavorable decision on an administrative level, our chances of loss have been considered possible.

Administrative Proceedings involving our Directors or Officers

In July 2010, the Superintendencia de Instituciones Financieras de Argentina, the Argentine Central Bank, initiated an
administrative investigation against Banco Hipotecário, S.A. Pursuant to Argentine regulations, all directors may be named in such a proceeding, and therefore such proceeding included Banco Hipotecario S.A.s entire board of directors
(including, among others, Eduardo Elsztain and Saul Zang, members of our board of directors). In such investigation, the Argentine Central Bank alleged that Banco Hipotecário S.A. may have violated foreign exchange regulations as a result of
its repurchase between February 2004 and June 2005 of certain of its bonds that remained outstanding after Banco Hipotecário S.A.s 2004 debt restructuring. Violations of such foreign exchange regulations are potentially punishable with
penalties and fines that can be significant. Once the Argentine Central Bank investigation is completed, if warranted, the matter could be referred to a special Argentine court for economic matters which could conduct a full trial and has the power
to impose the aforementioned penalties and fines. In October 2010, Banco Hipotecário and the members of its board of directors filed with the Argentine Central Bank a response to the allegations, asking for dismissal of the proceedings. Since
August 2013, the trial period has been opened. Banco Hipotecário has submitted an appeal for the reversal of a resolution of the Argentine Central Bank pursuant to which certain evidences were not admitted. Although the outcome of the
proceeding remains unresolved at this time, Banco Hipotecário and its directors have stated that they consider the allegations of the Argentine Central Bank to be entirely without merit.

In May 2011, the Argentine Central Bank initiated an administrative investigation against Banco Hipotecário S.A. and its board of
directors. Pursuant to Argentine regulations, all directors may be named in such a proceeding, and therefore such proceeding included Banco Hipotecário S.A.s entire board of directors (including, among others, Eduardo Elsztain and Saul
Zang, members of our board of directors). In such proceeding, the Argentine Central Bank alleged that Banco Hipotecário S.A. had extended loans to the nonfinancial public sector without the previous authorization of the Argentine Central
Bank, through an inadequate credit policy exceeding the limits of the apportionment of credit risk with respect to the nonfinancial public sector and, with respect to transactions with counterparties, excessive demands of assets in guarantee,
insufficient minimum capital requirements, and objections with respect to accounting practices. In May 2011, Banco Hipotecário and the members of its board of directors filed with the Argentine Central Bank a response to the allegations,
asking for dismissal of the proceedings. Although the outcome of the proceeding remains unresolved at this time, Banco Hipotecário and its directors have stated that they consider the allegations of the Argentine Central Bank to be entirely
without merit.

In April 2012, the Argentine Central Bank initiated an administrative investigation against Banco Hipotecário, S.A.
and its members of the board of directors. Pursuant to Argentine regulations, all directors may be named in such a proceeding, and therefore such proceeding included Banco Hipotecário S.A.s entire board of directors (including, among
others, Eduardo Elsztain and Saul Zang, members of our board of directors). In such proceeding, the Argentine Central Bank alleged that Banco Hipotecário S.A. has acquired silver bars with funds from its Exchange General Position violating
certain Argentine Central Bank regulations. In September 2012, Banco Hipotecário and the members of its board of directors filed with the Argentine Central Bank a response to the allegations, asking for dismissal of the proceedings. Since
August 2013, the trial period has been opened. Banco Hipotecário has submitted an appeal for the reversal of a resolution of the Argentine Central Bank pursuant to which certain evidences were not admitted. Although the outcome of the
proceeding remains unresolved at this time, Banco Hipotecário and its directors have stated that they consider the allegations of the Argentine Central Bank to be entirely without merit.



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In August 2012, the Argentine Central Bank initiated an administrative investigation against
Banco Hipotecário S.A. and its Chairman, Eduardo Elsztain, alleging the submission of certain documents related to the appointment of members of the board of directors out of term. In September 2012, Banco Hipotecário filed with the
Argentine Central Bank a response to the allegations, asking for dismissal of the proceedings. Although the outcome of the proceeding remains unresolved at this time, Banco Hipotecário and its directors have stated that they consider the
allegations of the Argentine Central Bank to be entirely without merit.

In September 2012, the Argentine Central Bank initiated an
administrative investigation against the members of the board of directors of Banco Hipotecário S.A. (including, among others, Eduardo Elsztain and Saul Zang, members of our board of directors). In such proceeding the Argentine Central Bank
alleged certain irregularities in the affidavits submitted by several members of the board of directors. In November 2012, a response to the allegations was filed, asking for dismissal of the proceedings. Although the outcome of the proceeding
remains unresolved at this time, Banco Hipotecários directors have stated that they consider the allegations of the Argentine Central Bank to be entirely without merit.

In November 2012, the Argentine Central Bank initiated an administrative investigation against Banco Hipotecário S.A. and the members
of the board of directors (including, among others, Eduardo Elsztain and Saul Zang, members of our board of directors) alleging that Banco Hipotecário S.A. has not accomplished certain minimum rules of intern control established in Argentine
Central Bank regulations. In February 2013, Banco Hipotecário filed with the Argentine Central Bank a response to the allegations, asking for dismissal of the proceedings. Although the outcome of the proceeding remains unresolved at this
time, Banco Hipotecário and its directors have stated that they consider the allegations of the Argentine Central Bank to be entirely without merit.

In February 2014, the Unit of Financial Information (Unidad de Información Financiera) of Argentina initiated a summary
proceeding against Banco Hipotecáno S.A. and the members of its board of directors (including, among others, Eduardo Elsztain and Saul Zang, members of our board of directors) alleging the violation of the provisions of Section 21 of Law
No 25,246, as amended, and Resolution No. 228/2007 of the Unit of Financial Information, due to certain defaults detected by the Argentine Central Bank in the inspection of the organization and in internal controls implemented for the
prevention of money-laundering derived from illegal activities. In March 2014, the relevant defenses and arguments were filed in support of the bank and the individuals subject to the summary proceeding. This proceeding is under analysis by the
Summary Proceeding Division of the Unit of Financial Information.

On July 28, 2014, Mr. André Guillaumon (our
Chief Operating Officer) was summoned in a criminal action, in which Mr. Wender Santos Vinhadelli (the manager of Chaparral Farm), is also part. In this proceeding, the Public Prosecutors Office is alleging that the defendants committed
crimes against the labor organization and the environment. A defense for Messrs. Guillaumon and Vinhadelli has been presented but others involved still have to be summoned. We have not made any provision in conneciton with this proeeding due to the
impossibility of assessing an amount for the criminal claim.

In August 2014, the Argentine Central Bank initiated an administrative
investigation against Banco Hipotecario S.A. and its members of the board of directors (including, among others, Eduardo Elsztain and Saul Zang, members of our board of directors). In such proceeding, the Argentine Central Bank alleged that Banco
Hipotecario S.A. has transferred currency abroad between August and October 2008 as guarantee of a swap transaction CER Swap Linked to PG08 and External Debt without the authorization of the Argentine Central Bank. The bank is preparing
the response to the allegations, asking for dismissal of the proceedings. No provision has been made.

Distributions to Shareholders

Amounts Available for Distribution

At each annual shareholders meeting, our board of directors is required to submit to shareholder approval its proposal on the
allocation of our net income for the preceding year. Pursuant to Brazilian corporate law, the proposal of the board of directors has to be evaluated by the fiscal council (conselho fiscal), if in operation. Brazilian corporate law defines
net income for any fiscal year as the results in a given year after the deduction of accrued losses from prior years, the provisions for income and social contribution taxes for that year, and any amounts allocated to profit-sharing
payments to the employees and management (provided, however, that such payments will only be disbursed after payment of the mandatory dividend to the companys shareholders). All calculations in connection with net income and its allocation to
reserves are based on the audited financial statements for the preceding fiscal year.



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Our bylaws provide that an amount equal to at least 25.0% of our adjusted net income for any
given year should be available for distribution as a mandatory dividend or interest on shareholders equity. Adjusted net income is calculated by adjusting net income as follows: (i) deducting amounts allocated to legal reserve, statutory
reserve, contingency reserve, retained earnings and unrealized profit reserve, as applicable; (ii) adding amounts reversed from the contingency reserve; and (iii) adding unrealized profit reserve amounts, upon their realization and if not
offset by subsequent losses, if any. Such amount represents the minimum mandatory dividend, or mandatory dividend. The allocation of amounts to the mentioned reserves cannot be made to the detriment of the payment of the mandatory dividend.
Moreover, the minimum mandatory dividend may be limited to the realized portion of net income. Our calculation of net income and allocations to reserves for any year, as well as the amounts available for distribution, are determined on
the basis of our financial statements prepared in accordance with Brazilian corporate law. For more information, see Item 8Financial InformationPayment of Dividends and Interest on Shareholders Equity below.

Reserve Accounts

Corporations subject to
Brazilian corporate law usually have two main categories of reserve accounts, which may be used for purposes of dividend payments: income reserve accounts and capital reserve account.

Income Reserve Accounts

Pursuant to Brazilian corporate law, our income reserve accounts are comprised of the legal reserve, unrealized profit reserve, contingency
reserve, discretionary reserves and profit retention reserve.

The balance of the profit reserves, except the balances of contingency,
fiscal subsidies and unrealized profit reserves may not exceed the amount of our capital stock. In case of excess, our shareholders shall decide at a shareholders meeting whether the excess amount will be used to pay or increase our capital
stock or pay dividends.

Legal reserve: Under Brazilian corporate law, we are required to maintain a legal reserve to which we must
allocate 5.0% of our net income for each fiscal year until the aggregate amount of the reserve equals 20.0% of our capital stock. However, we are not required to make any allocations to our legal reserve in a year in which the legal reserve, when
added to our other established capital reserves, exceeds 30.0% of our capital stock. The amounts allocated to such reserve must be approved by our shareholders in a shareholders meeting, and may only be used to increase our capital stock or to
offset net losses. Therefore, it is not available for the payment of dividends. As of June 30, 2014, we had no funds allocated to legal reserve.

Contingency reserve: Pursuant to Brazilian corporate law, a percentage of our net income may be allocated to a contingency reserve for
anticipated losses that are deemed probable in future years, if their amount may be estimated. This allocation has to be proposed by the companys management and approved at shareholders meeting. The managements proposal must
indicate the cause of the anticipated loss and justify the need for such allocation. Any amount so allocated must be reversed in the fiscal year in which a loss that had been anticipated fails to occur as projected or charged off in the event that
the anticipated loss occurs. As of June 30, 2014, we had no contingency reserve allocated.

Fiscal subsidies reserve:
The part of net income corresponding to amounts granted by the government to our company for investment purposes may be allocated to the fiscal subsidies reserve. Pursuant to Brazilian corporate law, this allocation is only permitted if proposed by
our management and approved at the shareholders meeting. Such amounts will not be taken into account for purposes of the calculation of the mandatory dividend. As of June 30, 2014, we had no fiscal subsidies reserve allocated.

Unrealized profits reserve: Pursuant to Brazilian corporate law, the amount by which the mandatory dividend exceeds the realized net
income in any given year may be allocated to the unrealized profits reserve, and the mandatory dividends may be limited to the realized portion of the net income. Brazilian corporate law defines realized net income as the amount by which our net
income exceeds the sum of our net positive results, if any, from the equity method of accounting; and the income, gains or profits resulting from transactions that occurred in the relevant fiscal year but that will be received by us after the end of
the next year. Profits recorded in the unrealized profit reserve must be added to the next mandatory dividend distributed after the realization of such profits, if not absorbed by losses in subsequent years. As of June 30, 2014, we had no
unrealized profit reserve allocated.



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Retained earnings reserve: Pursuant to Brazilian corporate law, we are permitted to
provide for the allocation of part of our net income to discretionary reserve accounts that may be established in accordance with our bylaws, which must also indicate the purpose, allotment criteria and maximum amount of the reserve. The allocation
of net income to retained earnings reserve accounts may not be made if it affects the payment of the minimum mandatory dividend. As of June 30, 2014, we had no funds allocated to as discretionary reserves.

Capital Reserve Account

Pursuant to Brazilian corporate law, we may maintain capital reserves in which we may record goodwill paid in connection with the subscription
of our shares, mergers, sale of warrants, subscription bonds, participation certificates (which are not applicable to us), debentures, donations, stock option granted and governmental granting for investments. These reserves may only be used for the
following purposes: (i) to offset losses that exceed the retained earnings and profit reserves, (ii) to redeem, repay or purchase shares of our capital stock, and (iii) to increase our capital stock. The amounts allocated to our
capital reserve account are not considered for purposes of the calculation of mandatory dividends. As of June 30, 2014, we had R$4.2 million allocated to a capital reserve.

Payment of Dividends and Interest on Shareholders Equity

Brazilian corporate law requires that the bylaws of a Brazilian company specify a minimum percentage of the available income for the annual
distribution of dividends, known as mandatory dividend, which must be paid to shareholders as either dividends or interest on shareholders equity. The basis of the mandatory dividend is a percentage of the net income, as adjusted pursuant to
Brazilian corporate law. Under our bylaws, a minimum of 25.0% of our adjusted net income should be intended for the distribution and payment to our shareholders as mandatory dividend. However, the payment of mandatory dividends to our shareholders
may be limited to the amount of realized net income in a given year, provided the difference should be recorded as unrealized income reserve. Our calculation of net income and allocations to reserves for any year, as well as the amounts available
for distribution, are determined on the basis of our non-consolidated financial statements prepared in accordance with Brazilian corporate law. The mandatory dividend may also be paid as interest on shareholders equity, in which event it is
deemed a deductible expense for purposes of income and social contribution taxes on revenue.

In addition, our board of directors may
advise our shareholders that additional dividends may be distributed from other income or reserves legally available for distribution. Brazilian corporate law allows, however, a company to suspend such dividend distribution if its board of directors
reports at our annual shareholders meeting that the distribution would be inadvisable given the companys financial condition. The fiscal council, if in place at the time, should review any suspension of the mandatory dividend. In
addition, our management should submit a report to the CVM setting forth the reasons for the suspension. Net income not distributed by virtue of a suspension is allocated to a separate reserve and, if not absorbed by subsequent losses, is required
to be distributed as dividends as soon as the financial condition of the company should permit such payment.

Our board of directors may
distribute interim dividends on the basis of monthly, by-monthly, quarterly or semi-annual financial statements. Our dividend policy has to observe at all times the mandatory dividend required under Brazilian corporate law.

Shareholders have a three-year period from the date of the payment to claim the dividends or interest on shareholders equity with
respect to their common shares, as applicable, after which the aggregate amount of any unclaimed amounts legally reverts to us.

Dividends

The distribution of dividends in any given fiscal year is proposed by our management officers (Diretoria) to the board of
directors, which then submits a detailed proposal to the shareholders meeting. In preparing this proposal, the board of directors will take into account our business strategy, investment plans, financial condition and the recommendations of
the fiscal council. The proposal for distribution of dividends is then submitted to our annual shareholders meeting, in which a majority of the voting shareholders is necessary to approve it. We may distribute additional dividends if so deemed
adequate by our board of directors in view of our capital structure. Our board of directors may revise or modify our dividend policy at any time.



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We are required by Brazilian corporate law and our bylaws to hold an annual shareholders
meeting no later than four months after the end of each fiscal year, at which time the allocation of the results of operations in any year and the distribution of an annual dividend are reviewed. The distribution of annual dividends is based on our
audited financial statements prepared for the immediately preceding fiscal year.

Any holder of record of common shares at the time a
dividend is declared is entitled to receive dividends. Under Brazilian corporate law, dividends are generally required to be paid within 60 days following the date on which the dividend is declared, unless the shareholders resolution
established another payment date, which, in any event, must occur before the end of the year in which the dividend is declared. Our bylaws do not require that dividend payments be adjusted for inflation.

Interest on Shareholders Equity

Since January 1, 1996, Brazilian companies have been authorized to pay interest on shareholders equity to shareholders, and to treat
those payments as deductible expenses for purposes of calculating corporate income tax and, since 1997, the social contribution tax, as well. The amount of the tax deduction in each year is limited to the greater of (i) 50.0% of our net income
(after the deduction of social contribution on net profit, but before taking into account the provision for corporate income tax and the amounts attributable to shareholders as interest on shareholders equity) for the period in respect of
which the payment is made; and (ii) 50.0% of our accumulated profits and income reserves at the beginning of the relevant period. The rate applied in calculating interest on shareholders equity cannot exceed the pro rata daily variation
of the TJLP.

Payments of interest on shareholders equity to our shareholders, whether or not residing in Brazil, are subject to
Brazilian withholding tax at the rate of 15.0%. A tax rate of 25.0% applies if the shareholder receiving such interest on shareholders equity resides at a Tax Haven Jurisdiction, which is defined under Brazilian tax laws as a country where
income tax is not levied, or levied at a maximum rate lower than 20.0%, or a country where local laws restrict disclosure of equity or investment ownership. See Item 10Additional InformationTaxationBrazilian Tax
ConsiderationsInterest on Shareholders Equity.

Amounts paid as interest on shareholders equity, net of withheld
income tax, can be taken into consideration for purposes of distribution of the mandatory dividend. If a distribution of interest on shareholders equity in any given fiscal year is not recorded as part of the mandatory dividend distribution,
we will not withhold the applicable income tax, which will have to be paid by our shareholders.

Pursuant to Law No. 9,249, dated
December 26, 1995, as amended, interest on shareholders equity paid or payable to our shareholders should be computed in our results for the year under financial expenses. For purposes of the presentation of financial statements, however,
these amounts revert to the statement of income charged to accumulated earnings as profit distribution.

We have never paid interest on
shareholders equity since the beginning of our operations.

Recent Dividend Payments

As of June 30, 2014, 2012 and 2011, there was no distribution of dividends to our shareholders as our net income for the years ended
June 30, 2011 and 2012 was used to absorb accumulated losses and we recorded a loss for the year ended June 30, 2014 and 2010. The distribution of dividends for the year ended June 30, 2013 was approved in our shareholders
meeting held on October 29, 2013, in the amount of R$5.9 million, or R$0.10 (or US$0.05) per share per share.

B. Significant Changes

The Company is not aware of any changes bearing upon its financial condition since the date of the financial statements included in this Annual
Report on Form 20-F.



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ITEM 9THE OFFER AND LISTING

A.Offer and listing details

Price
History of our Common Shares and ADRs

Our common shares began trading on the Novo Mercado market segment of the
BM&FBOVESPA on May 15, 2006 under the symbol AGRO3. The ISIN for our common shares is BRAGROACNOR7.

The following table
shows the low and high trading price of our common shares for the five most recent full financial years:



|             |  |                          |       |  |     |  |      | 
|------------ |  | ------------------------ | ----- |  | --- |  | ---- | 
|             |  | BM&FBOVESPA              |      
|For the year |  | High                     |       |  | Low | 
|             |  | (in R$ per common share) |      
|2009         |  |                          | 11.25 |  |     |  | 5.00 | 
|2010         |  |                          | 11.00 |  |     |  | 7.99 | 
|2011         |  |                          | 11.50 |  |     |  | 8.25 | 
|2012         |  |                          | 10.45 |  |     |  | 6.72 | 
|2013         |  |                          | 11.63 |  |     |  | 9.45 | 



|Source: | Bloomberg
|------- | ---------

The following table shows the low and high trading price of our common shares
for each calendar quarter since July 1, 2012:



|                            |  |                          |       |  |     |  |      | 
|--------------------------- |  | ------------------------ | ----- |  | --- |  | ---- | 
|                            |  | BM&FBOVESPA              |      
|Three-month calendar period |  | High                     |       |  | Low | 
|                            |  | (in R$ per common share) |      
|Third quarter 2012          |  |                          | 9.61  |  |     |  | 7.53 | 
|Fourth quarter 2012         |  |                          | 10.08 |  |     |  | 8.80 | 
|First quarter 2013          |  |                          | 10.30 |  |     |  | 9.50 | 
|Second quarter 2013         |  |                          | 11.63 |  |     |  | 9.45 | 
|Third quarter 2013          |  |                          | 11.35 |  |     |  | 9.07 | 
|Fourth quarter 2013         |  |                          | 10.23 |  |     |  | 9.30 | 
|First quarter 2014          |  |                          | 9.50  |  |     |  | 7.75 | 
|Second quarter 2014         |  |                          | 10.39 |  |     |  | 8.40 | 
|Third quarter 2014          |  |                          | 10.00 |  |     |  | 9.06 | 



|Source: | Bloomberg
|------- | ---------

The following table shows the low and high trading price of our common shares
for each month during the previous six months:



|                                        |  |                          |       |  |     |  |      | 
|--------------------------------------- |  | ------------------------ | ----- |  | --- |  | ---- | 
|                                        |  | BM&FBOVESPA              |      
|One-month calendar period               |  | High                     |       |  | Low | 
|                                        |  | (in R$ per common share) |      
|April 2014                              |  |                          | 9.18  |  |     |  | 8.40 | 
|May 2014                                |  |                          | 10.39 |  |     |  | 8.95 | 
|June 2014                               |  |                          | 10.38 |  |     |  | 9.40 | 
|July 2014                               |  |                          | 10.00 |  |     |  | 9.39 | 
|August 2014                             |  |                          | 9.80  |  |     |  | 9.55 | 
|September 2014                          |  |                          | 9.71  |  |     |  | 9.06 | 
|October 2014 (through October 27, 2014) |  |                          | 9.20  |  |     |  | 7.22 | 



|Source: | Bloomberg
|------- | ---------



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In September 2010, we established a Level 1 American Depositary Receipt (ADR) program in the
United States, which, as of September 20, 2010, has allowed our ADRs to be traded on the over-the-counter (OTC) market in the United States under the symbol BRCPY.

In November 2012, we established a Level 2 American Depositary Receipt (ADR) program in the United States, which, as of November 8, 2012,
has allowed our ADRs to be traded on New York Stock Exchange (NYSE) under the symbol LND.

The following table shows the low
and high trading price of our ADRs for each year since our ADRs were listed on the NYSE:



|                              |  |                  |      |  |     |  |      | 
|----------------------------- |  | ---------------- | ---- |  | --- |  | ---- | 
|                              |  | NYSE             |     
|For the year                  |  | High             |      |  | Low | 
|                              |  | (in US$ per ADR) |     
|2012 (since November 8, 2012) |  |                  | 4.90 |  |     |  | 4.40 | 
|2013                          |  |                  | 5.38 |  |     |  | 3.84 | 



|Source: | Bloomberg
|------- | ---------

The following table shows the low and high trading price of our ADRs since
our ADRs were listed on the NYSE:



|                                             |  |                  |      |  |     |  |      | 
|-------------------------------------------- |  | ---------------- | ---- |  | --- |  | ---- | 
|                                             |  | NYSE             |     
|Three-month calendar period                  |  | High             |      |  | Low | 
|                                             |  | (in US$ per ADR) |     
|Fourth quarter 2012 (since November 8, 2012) |  |                  | 4.90 |  |     |  | 4.40 | 
|First quarter 2013                           |  |                  | 5.27 |  |     |  | 4.80 | 
|Second quarter 2013                          |  |                  | 5.38 |  |     |  | 4.72 | 
|Third quarter 2013                           |  |                  | 5.01 |  |     |  | 3.84 | 
|Fourth quarter 2013                          |  |                  | 4.95 |  |     |  | 3.96 | 
|First quarter 2014                           |  |                  | 4.09 |  |     |  | 3.24 | 
|Second quarter 2014                          |  |                  | 4.67 |  |     |  | 3.75 | 
|Third quarter 2014                           |  |                  | 4.38 |  |     |  | 3.75 | 



|Source: | Bloomberg
|------- | ---------

The following table shows the low and high trading price of our ADRs for
each month during the previous six months:



|                                        |  |                  |      |  |     |  |      | 
|--------------------------------------- |  | ---------------- | ---- |  | --- |  | ---- | 
|                                        |  | NYSE             |     
|One-month period                        |  | High             |      |  | Low | 
|                                        |  | (in US$ per ADR) |     
|April 2014                              |  |                  | 4.08 |  |     |  | 3.75 | 
|May 2014                                |  |                  | 4.67 |  |     |  | 4.06 | 
|June 2014                               |  |                  | 4.65 |  |     |  | 4.18 | 
|July 2014                               |  |                  | 4.40 |  |     |  | 4.19 | 
|August 2014                             |  |                  | 4.38 |  |     |  | 4.18 | 
|September 2014                          |  |                  | 4.35 |  |     |  | 3.75 | 
|October 2014 (through October 27, 2014) |  |                  | 3.77 |  |     |  | 2.92 | 



|Source: | Bloomberg
|------- | ---------



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As of June 30, 2014, we had 9,349,564 ADRs outstanding, with no par value. There are no
restrictions on ownership of our ADRs by individuals or legal entities domiciled outside Brazil.

Investments in our Common Shares by Non-residents of
Brazil

Investors residing outside Brazil are authorized to purchase equity instruments, including our common shares, on the
BM&FBOVESPA, provided that they comply with the registration requirements set forth in Resolution No. 2,689 and CVM Instruction 325.

With certain limited exceptions, Resolution No. 2,689 investors are permitted to carry out any type of transaction in the Brazilian
financial capital market involving a security traded on a Brazilian stock, futures or organized OTC market. Investments and remittances outside Brazil of gains, dividends, profits or other payments derived from our common shares are made through the
foreign exchange market.

In order to become a Resolution No. 2,689 investor, an investor residing outside Brazil must:



| |  |  | appoint a representative in Brazil with powers to take actions relating to the investment;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | obtain a taxpayer identification number from the Brazilian tax authorities;
| | - |  | ---------------------------------------------------------------------------



| |  |  | appoint an authorized custodian in Brazil for the investments, which must be a financial institution duly authorized by the Central Bank and CVM; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | through its representative, register itself as a foreign investor with the CVM and the investment with the Central Bank.
| | - |  | ------------------------------------------------------------------------------------------------------------------------

Securities and other financial assets held by foreign investors pursuant to Resolution No. 2,689 must be registered or maintained in
deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading by foreign investors are generally restricted to transactions involving securities listed on the Brazilian stock
exchanges or traded in organized OTC markets licensed by the CVM.

Foreign direct investors under Law No. 4,131, dated
September 3, 1962, as amended, or Law No. 4,131 may sell their shares in both private and open market transactions, but these investors are currently subject to less favorable tax treatment on gains. See Item 10Additional
InformationTaxationBrazilian Tax ConsiderationsTaxation of Gains.

A foreign direct investor under Law
No. 4,131 must:



| |  |  | register as a foreign direct investor with the Central Bank;
| | - |  | ------------------------------------------------------------



| |  |  | obtain a taxpayer identification number from the Brazilian tax authorities;
| | - |  | ---------------------------------------------------------------------------



| |  |  | appoint a tax representative in Brazil; and
| | - |  | -------------------------------------------



| |  |  | appoint a representative in Brazil for service of process in respect of suits based on the Brazilian corporate law.
| | - |  | -------------------------------------------------------------------------------------------------------------------

IOF/Exchange Tax

Brazilian
law imposes the IOF/Exchange Tax on the conversion of Reais into foreign currency and on the conversion of foreign currency into Reais. Effective as of October 20, 2009, IOF/Exchange Tax for any investment made by Non-Resident Holders
(as defined in Item 10Additional InformationTaxationBrazilian Tax Considerations) in the Brazilian financial and capital markets and transactions related to the constitution of initial or additional guarantee margins
before BM&FBOVESPA was increased from zero to 6.0%, except for, among others, certain variable income transactions carried out within BM&FBOVESPA and those related to equity investments in initial public offerings of shares in a transaction
carried out within BM&FBOVESPA.

The outflow of resources from Brazil related to investments carried out by Non-Resident
Holders in the Brazilian financial and capital markets remains subject to IOF/Exchange at a zero percent rate. In any case, the Brazilian executive branch may increase such rates at any time, up to 25.0%, with no retroactive effect.



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B.Plan of Distribution

Not applicable.

C.Markets

Our shares are listed on the BM&FBOVESPA, and our ADRs are listed on the NYSE.

Trading on the BM&FBOVESPA

In 2000,
Bolsa de Valores de São Paulo was reorganized through the execution of a memorandum of understanding by the Brazilian stock exchanges and assumed all of the shares traded in Brazil. In 2007, the Bolsa de Valores de São Paulo was
subject to a corporate reorganization, by which, among other things, the quotas issued by it were transferred to BOVESPA Holding S.A. and Bolsa de Valores de São Paulo S.A-BVSP. The operations of BOVESPA Holding S.A. and Bolsa de Mercadorias
e Futuros-BM&F S.A. were subsequently integrated, resulting in the creation of the BM&FBOVESPA. In late 2008, the Bolsa de Valores de São Paulo-BVSP and the Companhia Brasileira de Liquidação e Custódia were
merged into the BM&FBOVESPA, which currently concentrates all trading activities of shares and commodities in Brazil.

Trading on the
exchange is conducted by authorized members. Trading sessions take place every business day, from 10:00 a.m. to 5:00 p.m. or from 11:00 a.m. to 6:00 p.m. during daylight savings time in Brazil, on an electronic trading system called Megabolsa.
Trading is also conducted between 5:45 p.m. and 7:00 p.m., or between 6:45 p.m. and 7:30 p.m. during daylight savings time in Brazil, in an after-market system connected to both traditional broker dealers and brokerage firms operating on the
Internet. This after-market trading is subject to regulatory limits on price volatility of securities traded by investors operating on the Internet.

In order to maintain control over the fluctuation of the BM&FBOVESPA index, the BM&FBOVESPA has adopted a circuit breaker
system pursuant to which trading sessions may be suspended for a period of 30 minutes or one hour whenever the BM&FBOVESPA index falls below 10% or 15%, respectively, in relation to the closing index levels of the previous trading session. In
addition, in case the BM&FBOVESPA index falls below the 20% mark, the BM&FBOVESPA may suspend trading sessions for a period of time to be established at its discretion at the time said lower mark is reached.

When investors trade shares on the BM&FBOVESPA, the trade is settled in three business days after the trade date, without adjustments to
the purchase price. The seller is ordinarily required to deliver the shares to the exchange on the third business day following the trade date. Delivery of and payment for shares are made through the facilities of an independent clearing house, the
Central Depository BM&FBOVESPA, which handles the multilateral central counterparty settlement of both financial obligations and transactions involving securities. According to the regulations of the BM&FBOVESPA, financial settlement is
carried out through the system of transfer of funds of the Central Bank and the transactions involving the sale and purchase of shares are settled through the BM&FBOVESPA custody system. All deliveries against final payment are irrevocable.

TheNovo Mercadosegment

The Novo Mercado is a stock market segment of the BM&FBOVESPA intended for companies meeting certain requirements and
agreeing to adhere to heightened corporate governance rules. The principal Novo Mercado rules and requirements are summarized as follows:



| |  |  | capital stock should be exclusively composed of common shares and the issuance or maintenance of so called founders shares is prohibited;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | public float of shares should represent at least 25.0% of the capital stock;
| | - |  | ----------------------------------------------------------------------------



| |  |  | in the event of a transfer of control, even if through a series of successive sales, the transfer should be subject to the minority shareholders being granted the same conditions offered to any controlling shareholders,
including the same price, through a tender offer for the acquisition of shares (tag-along rights);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the board of directors should be composed of at least five members, of which at least 20.0% should be independent directors elected during the shareholders meeting for a term of up to two years, with reelection
permitted;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | new members of the board of directors and the executive officers are required to sign an agreement, the Managements Consent Statement (Termo de Anuência dos Administradores), that makes their taking
of office subject to the execution of this agreement, through which the new directors and executive officers of the company take personal responsibility to act in accordance with the listing agreement with the Novo Mercado, the rules of the
Market Arbitration Chamber (Câmara de Arbitragem do Mercado) and the Novo Mercado regulation;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a statement of cash flow (both the companys and consolidated) must be included in the quarterly financial reports and annual financial statements;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the schedule of corporate events should be disclosed annually to the shareholders, by the end of the month of January;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | delisting from the Novo Mercado, as well as the decision to cancel the registration as a public company, should be subject to any controlling shareholders making a public tender offer for the acquisition of
all outstanding shares of the company, at a minimum price of their economic value determined in a valuation report prepared by a specialized institution or company with recognized experience and independent from persons with the power to make
decisions within a company, such as directors or any controlling shareholders, in addition to meeting the requirements set forth in Article 4 of the Brazilian corporate law; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the issuer, any controlling shareholders, management and members of the fiscal council should submit to the Market Arbitration Chamber under the terms of its regulation, any dispute or controversies that may arise among
themselves, relating to and resulting from, specifically, the application, validity, effectiveness, interpretation, violation and effects of the arrangements contained in the Brazilian corporate law, our bylaws, the rules and regulations of the CMN,
the Central Bank, and the CVM, as well as additional rules and regulations applicable to the capital markets, Novo Mercado regulation, the rules of the Market Arbitration Chamber and the listing agreement with the Novo Mercado.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Brazilian securities markets are substantially smaller, less liquid and more volatile than major securities markets in
the United States. The BM&FBOVESPA, which is the principal Brazilian stock exchange, had a market capitalization of R$1.7 trillion (US$724 billion) at December 31, 2013 and an average daily trading volume of R$5.3 billion (US$2.48 billion)
for 2013. In comparison, aggregate market capitalization of the companies (including U.S. and non-U.S. companies) listed on the NYSE was US$21.3 trillion at December 31, 2013 and the NYSE recorded an average daily trading volume of US$23.9
billion for 2013. There is also significantly greater concentration in the Brazilian securities markets. The ten largest companies in terms of market capitalization represented approximately 65.7% of the aggregate market capitalization of the
BM&FBOVESPA at December 31, 2013. The ten most widely traded stocks in terms of trading volume accounted for approximately 42.3% of all shares traded on the BM&FBOVESPA in 2013. These market characteristics may substantially limit the
ability of holders of our ADSs to sell the common shares underlying our ADSs at a price and at a time when they wish to do so and, as a result, could negatively impact the market price of our ADSs themselves.

Regulation of Brazilian securities markets

The Brazilian securities market is regulated by the CVM, as provided for by Law No. 6,385, dated December 7, 1976, as amended, or the
Brazilian Securities Exchange Law, and Brazilian corporate law. The CMN is responsible for granting licenses to brokerage firms to govern their incorporation and operation, and regulating foreign investment and exchange transactions, as provided for
by the Brazilian Securities Exchange Law and Law No. 4,595, dated December 31, 1964, as amended. These laws and regulations provide for, among other things, disclosure requirements, criminal sanctions for insider trading and price
manipulation, protection of minority shareholders, the procedures for licensing and supervising brokerage firms and the governance of Brazilian stock exchanges.

Under the Brazilian corporate law, a company is required to be publicly held, or companhia aberta, before listing its shares.
All publicly held companies are registered with the CVM and are subject to reporting requirements to periodically disclose information and material facts. A company registered with the CVM may trade its securities either on the Brazilian exchange
markets, including the BM&FBOVESPA, or in the Brazilian OTC market. Shares of companies listed on BM&FBOVESPA may not simultaneously trade on the Brazilian OTC market. The OTC market consists of direct trades between persons in which a
financial institution registered with the CVM serves as an intermediary.



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No special application, other than registration with the CVM (or, in case of organized OTC
markets, registration with the applicable one), is necessary for securities of a public company to be traded in this market. To be listed on the BM&FBOVESPA, a company must apply for registration with the BM&FBOVESPA and the CVM.

The trading of securities on the BM&FBOVESPA may be suspended at the request of a company in anticipation of a material announcement.
Trading may also be suspended on the initiative of the BM&FBOVESPA or the CVM based on or due to a belief that a company has provided inadequate information regarding a significant event or has provided inadequate responses to inquiries by the
CVM or the BM&FBOVESPA, among other reasons.

D.Selling Shareholders

Not applicable.

E.Dilution

Not applicable.

F.Expenses
of the Issue

Not applicable.

ITEM 10ADDITIONAL INFORMATION

A.Share Capital

Not
applicable.

B.Memorandum and Articles of Association

Organization, Register and Entry Number

We are a publicly-listed corporation, or sociedade por ações de capital aberto, organized in accordance with
Brazilian law. Our registered office is located at Avenida Faria Lima, 1309, 5th floor, in the city of São Paulo, State of São Paulo, Brazil. We are registered with the Commercial Registry of the state of São Paulo (Junta
Comercial do Estado de São Paulo) under NIRE No. 35.300.326.237, and with the CVM under No. 20036.

On
April 10, 2006, we and our principal shareholders entered into the Novo Mercado Participation Agreement (Contrato de Participação no Novo Mercado) with BM&FBOVESPA. Also, as required under the Novo Mercado
listing regulations, all our directors, officers and members of our fiscal council have undertaken to abide by the rules set forth in the Novo Mercado Participation Agreement and by the Novo Mercado listing segment rules and
regulations applicable to each of them.

Our common shares are traded on the Novo Mercado listing segment of
BM&FBOVESPA under the symbol AGRO3. In September 2010, we established a Level 1 American Depositary Receipt (ADR) program in the United States, which, as of September 20, 2010, has allowed our ADRs to be traded on the
over-the-counter (OTC) market in the United States under the symbol BRCPY. In November 2012, we established a Level 2 American Depositary Receipt (ADR) program in the United States, which, as of November 8, 2012, has allowed our
ADRs to be traded on New York Stock Exchange (NYSE) under the symbol LND.

Capital Stock

As of the date hereof, we have 58,422,400 common shares issued and outstanding, representing a book value of R$584,224,000. Our board of
directors is authorized under our bylaws to issue a number of shares representing a book value of up to R$3.0 billion without shareholder approval.

In April 2006, we completed our initial public offering which comprised the issuance of 583,200 new common shares at a price of R$1,000.00 per
common share. As a result of our initial public offering, our capital stock was increased by R$583 million.



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On October 31, 2007, our shareholders approved a stock split transaction whereby each of our
shares was divided into 100 shares. This transaction was intended to increase the liquidity of our shares and foster trading thereof in BM&FBOVESPA.

On October 20 and December 23, 2010, Cresud executed with Tarpon an addendum to the Share Purchase Agreement dated April 28,
2010, under which Cresud acquired, directly and indirectly, 9,581,750 shares of common stock of Brasilagro, representing 16.40% of its outstanding common stock and 64,000 First Issue Warrants and 64,000 Second Issue Warrants. Consequently, Cresud
paid R$25.2 million on October 20, 2010, R$50.8 million on December 23, 2010 and R$52.5 million on April 27, 2011. Consequently, Cresud holds 20,883,916 shares, or 35.75% of Brasilagros capital stock, and Cresud owns, directly
and indirectly, 168,902 First Issue Warrants and 168,902 Second Issue Warrants, and therefore Tarpon no longer holds any securities of ours.

The table below sets forth the participatory interests of our principal shareholders before and after such transaction:



|                        |  |                        |            |  |                       |  |        |                       |  |  |               |  |  |  |        | 
|----------------------- |  | ---------------------- | ---------- |  | --------------------- |  | ------ | --------------------- |  |  | ------------- |  |  |  | ------ | 
|                        |  | Before the Transaction |            |  | After the Transaction | 
|                        |  | Number ofCommonShares  |            |  | Percentage(%)         |  |        | Number ofCommonShares |  |  | Percentage(%) | 
|Cresud                  |  |                        | 11,302,166 |  |                       |  | 19.35  |                       |  |  | 20,883,916    |  |  |  | 35.75  | 
|Tarpon Agro LLC         |  |                        | 9,581,750  |  |                       |  | 16.40  |                       |  |  |              |  |  |  |       | 
|Elie Horn and Cape Town |  |                        | 3,274,500  |  |                       |  | 5.60   |                       |  |  | 3,274,600     |  |  |  | 5.61   | 
|Agro Investments        |  |                        | 612,000    |  |                       |  | 1.05   |                       |  |  | 612,000       |  |  |  | 1.05   | 
|Agro Managers           |  |                        | 141,450    |  |                       |  | 0.24   |                       |  |  | 141,450       |  |  |  | 0.24   | 
|Others                  |  |                        | 33,510,534 |  |                       |  | 57.36  |                       |  |  | 33,510,434    |  |  |  | 57.35  | 
|Total                   |  |                        | 58,422,400 |  |                       |  | 100.00 |                       |  |  | 58,422,400    |  |  |  | 100.00 | 

On February 4, 2011, our shareholders approved an increase in authorized capital of R$1.5 billion, from
R$1.5 billion to R$3.0 billion, in order to fund future growth.

As of the date of this Annual Report, our fully paid capital
stock was R$584,224,000.00, divided into 58,422,400 registered book-entry common shares, without par value. Our bylaws authorize our board of directors to increase our capital stock up to R$3.0 billion without shareholder approval. Any capital
increase in excess of such amount must be approved at a shareholders meeting. We do not hold treasury stock. The Novo Mercado Participation Agreement precludes us from issuing preferred stock or participation certificates (partes
beneficiárias) in any future capital increases. As of the date of this Annual Report, our controlling shareholder Cresud holds 39.64% of our capital stock. See Item 7Major Shareholders and Related Party Transactions.

Corporate Purpose

Article 3 of
our bylaws define our corporate purposes as including: (i) the development of agricultural and forestry activities and the rendering of services directly or indirectly related thereto; (ii) the purchase, sale and/or lease of real estate
properties in agricultural and/or urban areas; (iii) the importation and exportation of agricultural products, supplies and inputs; (iv) the brokering of real estate transactions of any kind; (v) the holding equity investments in
other companies and business ventures of any kind related to our corporate purpose, either in Brazil or abroad; and (vi) the management of our own or third-party assets.

Share Register

Banco Bradesco S.A. holds
the book-entry register of our common shares. Share transfers are made upon written instructions of the transferor or court order, by charging the transferors share account and crediting the transferees account by the appropriate amount.

Rights of Common Shares

Our
capital stock consists exclusively of common shares. Each of our common shares entitles its holder to one vote at our shareholders meetings, and to receive pro rata dividends or other distributions. See Item 8Financial
InformationDividends and Dividend Policy for a description of distribution rights in connection with our common shares. Holders of our common shares also have the right, subject to certain exceptions provided for in Brazilian corporate
law, but not the obligation, to subscribe to our future capital increases. Our shareholders are also entitled to share ratably our remaining assets in case we are liquidated, after payment of all our liabilities.



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Brazilian corporate law awards our shareholders the following rights, which cannot be
circumvented by bylaws amendments or majority resolutions at shareholders meetings: (i) the right to participate in the distribution of profits; (ii) the right to participate equally and ratably in any remaining residual assets in
the event of liquidation of the company; (iii) preemptive rights in the event of issuance of shares, convertible debentures or subscription warrants, except in certain specific circumstances, as set forth in Brazilian corporate law (see
Item 10Additional InformationPreemptive rights); (iv) the right to hold our management accountable, in accordance with the provisions of Brazilian corporate law; and (v) the right to withdraw in the cases specified
in Brazilian corporate law, including in the events of merger or consolidation, such as those described in Item 10Additional InformationWithdrawal and Redemption RightsWithdrawal Rights.

Furthermore, pursuant to our bylaws and in accordance with CVM and Novo Mercado rules and regulations, the direct or indirect
transfer of our control, either through one or a series of related transactions, is contingent upon the acquirer making a tender offer to acquire all of our shares.

As long as we are listed on the Novo Mercado, we may not issue preferred shares or participation certificates, and should we
decide to delist from the Novo Mercado, we must carry out a tender offer to acquire all shares traded on stock markets. For further information, see Item 10Additional InformationDelisting from the Novo Mercado
below.

Warrants

On March 15, 2006, our board of directors approved the issuance of warrants to our founding shareholders proportionally to their
subscription of shares during our capital increases. See Item 10Additional InformationDescription of Outstanding Warrants.

Shareholders Meetings

Pursuant to Brazilian corporate law, our shareholders have the power to take any action and approve any resolutions related to our
activities at shareholders meetings, provided that such meetings have been convened pursuant to the terms and procedures described in Brazilian corporate law and in our bylaws. It is the exclusive prerogative of the annual shareholders
meeting (assembleia geral ordinária) to review managements account of corporate activities; approve our financial statements; and determine the allocation of our net income and the payment of dividends with respect to the
previous fiscal year. Members of our board of directors and fiscal council are also typically appointed at the annual shareholders meeting, although such appointments may also take place at special shareholders meetings.

Our shareholders may also convene for special shareholders meetings, which may be held concurrently with the annual shareholders
meeting or at any time of the year.

The following actions, among others, may be taken exclusively at shareholders meetings:
(i) approve bylaws amendments; (ii) approve management accounts and financial statements; (iii) appoint and dismiss members of our board of directors and fiscal council; (iv) determine the aggregate compensation of the board of
directors, executive officers and fiscal council; (v) approve the companys dissolution, petition for bankruptcy or judicial or out-of-court reorganization proceedings, liquidation, merger, spin-off, or consolidation with any other
company, and any share mergers; (vi) approve pro rata share distributions to current shareholders, stock splits and reserve stock splits; (vii) approve stock option plans and similar arrangements for our management and employees,
and for the managers and employees of our direct or indirect subsidiaries; (viii) approve managements proposals regarding allocation of net income and distribution of dividends; (ix) approve capital increase above the limit
authorized in our bylaws; (x) appoint liquidators and members of the fiscal council during liquidation proceedings; (xi) approve the cancellation of our registration as a public company with the CVM; (xii) approve our delisting from
the Novo Mercado listing segment; (xiii) approve the engagement of an appraiser to evaluate the value of our shares in case of cancellation of our registration as a public company with the CVM or our delisting from the Novo
Mercado listing segment; and (xiv) pass resolutions on any matter submitted to the shareholders meeting by our board of directors.

Shareholders meetings are not allowed to circumvent certain specific shareholder rights enumerated in Brazilian corporate law. See
Item 10Additional InformationRights of Common Shares, above.



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Quorum

Brazilian corporate law generally provides that shareholders representing at least 25% of our voting capital stock are necessary to convene a
shareholders meeting on first call, except if the meeting is called to amend our bylaws, in which case two thirds of our voting capital stock are required on first call. In either case, if the applicable quorum is not reached on first call,
any percentage will suffice to convene the meeting on second call.

Approval of resolutions at shareholders meetings generally
requires the affirmative vote of shareholders representing at least the majority of common shares attending the meeting, either in person or represented by a proxy. Non-voting shares are disregarded for purposes of calculating the majority.

The Novo Mercado listing rules require, for the approval of certain issues, such as to retain a specialized firm to prepare a
valuation report with respect to the value of our common shares in the event of delisting from the Mercado Novo listing segment or cancelling our registration as a publicly-held company, the affirmative vote of shareholders representing at
least the majority of our issued and outstanding common shares (the Outstanding Shares) present at a shareholders meeting. In such hypothesis, the shareholders meeting must count on the presence of shareholders representing
at least 20% of our Outstanding Shares on first call, or on the presence of any percentage of our Outstanding Shares on second call, with blank votes not taken into account and with one vote entitled to each share. For these purposes, Outstanding
Shares within the meaning set forth in the Novo Mercado Participation Agreement and Novo Mercado listing segment regulations means all our issued and outstanding shares, but excluding, however, (i) the shares held by any
controlling shareholders or by affiliates of such controlling shareholders, (ii) the shares held by our managers, and (iii) treasury shares. See Item 10Additional InformationDelisting from the Novo Mercado
for additional information on this matter.

Notice of Shareholders Meetings

Brazilian corporate law requires that previous notice of any shareholders meeting be published on three different dates on the
federal or state official gazette and another newspaper of high circulation in the state of the corporate offices. Our company publishes meetings notices on the Official Gazette of the state of São Paulo (Diário Oficial do Estado de
São Paulo) and the newspaper Valor Econômico. The first notice must be published no later than 15 days before the date of the meeting on first call, and no later than eight days before the date of the shareholders meeting on
second call. In certain circumstances, the CVM may require that the first notice for the shareholders meeting be published no later than 30 days prior to the shareholders meeting. The CVM may also require, upon shareholder request, up to
15 additional days between such prior notice and any special shareholders meeting, in order to allow such shareholder to analyze the matters to be discussed at the meeting. In addition, our bylaws require that a shareholders meeting to
be convened to decide on the cancellation of our registration as a public company with the CVM or our delisting from the Novo Mercado listing segment must be called at least 30 days prior to the shareholders meeting. The notice of the
shareholders meeting must contain the agenda, date and venue of the meeting, and (if applicable) the nature of the proposed bylaws amendments.

Venue

Our
shareholders meetings take place at our head office in the city of São Paulo, in the state of São Paulo. Brazilian corporate law allows our shareholders to hold meetings in another location in the event of force majeure, provided
that the meetings are held in the city of São Paulo and the relevant notice includes a clear indication of the place where the meeting will occur.

Who May Call our Shareholders Meetings

Shareholders meetings are typically called by our board of directors, although they may also be called by the following: (i) any
shareholder, if our directors fail to call a shareholders meeting within 60 days after the date they were required to do so under applicable laws and our bylaws; (ii) holders of at least 5% of our capital stock, if our directors fail to
call a meeting within eight days following receipt of a justified request to call the meeting by those shareholders, indicating the proposed agenda; (iii) holders of at least 5% of our capital stock if our directors fail to call a meeting
within eight days after receipt of a request to call the meeting to establish the fiscal council; and (iv) our fiscal council (if already established), if our board of directors fails to call an annual shareholders meeting within one
calendar month after the date it was required to do so under applicable laws. The fiscal council (if already established) may also call a special shareholders meeting if it believes that there are important or urgent matters to be addressed.



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Conditions of Admission to a Shareholders Meeting

In order to attend and vote at shareholders meetings, shareholders must identify themselves and, 72 hours before the meeting, provide
evidence of the ownership of the voting shares, issued by the financial institution responsible for the bookkeeping of our shares, no earlier than five days before expiration off the 72-hour deadline mentioned herein. A shareholder may be
represented at a shareholders meeting by a proxy, provided that such proxy has been appointed less than one year before the meeting. Only attorneys, financial institutions, other shareholders, and our executive officers and directors can act
as proxies for our shareholders. An investment fund must be represented by its officers.

Management and Fiscal Council

Pursuant to our bylaws, and in accordance with Brazilian corporate law and the Novo Mercado listing rules, we are governed by our
board of directors (conselho de administração) and executive officers (diretoria).

Our bylaws require
that our board of directors be composed of five to nine directors. Currently, our board of directors is composed by seven members, of which three are independent directors, unrelated to our principal shareholders or to us. Our board members are
elected by our shareholders at the annual shareholders meeting, for a period of two consecutive years, with the possibility of reelection.

Brazilian corporate law permits cumulative voting upon the request of holders of at least 10% of our voting capital. Each share is granted as
many votes as the number of board seats, and each shareholder has the option to cast his or her votes for one or more candidates. However, pursuant to CVM Instruction 282 dated June 26, 1998, the threshold to trigger cumulative voting rights in
publicly held corporations may be reduced in proportion to the amount of capital stock, ranging from 5% to 10%. Shareholders representing 5% of our voting capital may request the adoption of cumulative voting rights.

Under applicable law, if there is no request for cumulative voting, the shareholders meeting will vote based on a previously registered
list, assuring shareholders that individually or collectively hold at least 15% of our common shares, in a separate vote, the right to elect one director and his or her alternate.

If cumulative voting is requested, each shareholder may vote for one or more board members. Each common share will entitle its holder to one
vote in the relevant shareholders meeting and each shareholder may cast votes for members as they wish.

Our bylaws require that we
have two to six executive officers. At the date of this Annual Report, we had four executive officers. They are elected by our directors for a period of one year, with the possibility of reelection. Pursuant to Brazilian corporate law, executive
officers must be residents of Brazil, but do not need to be shareholders.

At the annual and special shareholders meeting held on
October 31, 2012, our minority shareholders requested the formation of our fiscal council in accordance with our bylaws and Brazilian corporate law and appointed the members of our fiscal council and their respective alternates. The current
members of our fiscal council will exercise their duties until the annual shareholders meeting to be convened to approve the management accounts and financial statements for the fiscal year ended on June 30, 2013.

Transactions in Which Directors Have a Conflict of Interest

Pursuant to Brazilian corporate law, our directors and executive officers may not:



| |  |  | give any gifts at our expense, except for such reasonable gifts as are for the benefit of our employees or of the community in which we participate, upon approval by our board of directors;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | receive, by virtue of his or her position, any direct or indirect personal benefit from third parties without authorization in our bylaws or by our shareholders at a shareholders meeting;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | borrow money or property from us or use our property, services or credit for his or her own benefit or for the benefit of a company or third party in which he or she has an interest, without the prior approval of our
shareholders at a shareholders meeting or of our board of directors;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | take part in a corporate transaction in which he or she has an interest that conflicts with our interests or in the deliberations undertaken by our directors on the matter;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | take advantage of any commercial opportunity for his or her own benefit or for the benefit of a third party at the expense of the company when he or she learned of such opportunity through his or her position as a
director;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | fail to disclose a business opportunity in our interests with a view to exploiting the opportunity for personal gain, or for the benefit of a third party; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | acquire, in order to resell for profit, a good or right that is essential to our business operations, or that we intend to acquire for ourselves.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------

The compensation of our directors is determined by our shareholders at the annual shareholders meeting that approves the previous fiscal
years financial statements.

Allocation of Net Income and Dividend Distributions

Before each annual shareholders meeting, our directors and executive officers are required to recommend how to allocate our net income,
if any, from the preceding financial year. This allocation is subject to the approval of our shareholders. Brazilian corporate law defines net income for any particular financial year as net income after income tax and social
contribution for that financial year, net of any accumulated losses from prior financial years and any amounts allocated to employees and managements participation in our net income in such financial year.

According to our bylaws and Brazilian corporate law, net income for any given financial year will be allocated as follows: (i) 5% for the
formation of a legal reserve according to Brazilian corporate law, which is subject to a upper maximum limit of 20% of our capital stock (in addition, if for any given financial year, the total amount of the legal reserve plus any amounts of capital
reserves exceed 30% of our capital stock, additional contributions to the legal reserve will not be mandatory); (ii) payment of mandatory dividends, which cannot be less than 25% of our adjusted net income. After payment of mandatory dividends,
shareholders may decide to allocate outstanding net income to form a statutory expansion and investment reserve in accordance with the additional requirements provided for in our bylaws; and (iii) the remaining portion of the adjusted net
income may be allocated for investment, based on the budget approved by our general shareholders meeting. However, the remaining balance of the revenue reserves, excluding reserves for unrealized profits and contingencies, must not exceed the
value of our capital stock. If this limit is reached, a general shareholders meeting will be held to determine whether such excess amount shall be allocated as a capital increase or a distribution of dividends.

The general shareholders meeting may grant to our directors and executive officers a participation in the distribution of our profits,
after deducting accumulated losses and provisions for income tax and social contribution, in accordance with applicable law.

Withdrawal Rights

According to Brazilian corporate law, shareholders are entitled to withdrawal rights if they dissent from the approval of the
following actions at any shareholders meeting: (i) our spin-off (pursuant to the conditions described below); (ii) reduction in our mandatory dividends; (iii) change of our corporate form or purpose; (iv) our merger into,
or consolidation with, another company (as described below); and (v) our participation in a corporate group, as defined in Brazilian corporate law, except in the event our shares are widely held and liquid, as described below; or (vi) our
acquisition of the control of any company, if the acquisition price exceeds the limits established by Brazilian corporate law, except in the event our shares are widely held and liquid, as described below.

Our spin-off will only trigger withdrawal rights if it results in one of the following: (i) a change in our corporate purpose, unless the
spun-off assets and liabilities are transferred to an entity whose principal business purpose is consistent with our corporate purpose; (ii) a reduction of the minimum mandatory dividend to be paid to shareholders; or (iii) our
participation in a corporate group (as defined in Brazilian corporate law).

In cases where we: (i) merge into, or consolidate with,
another company; (ii) become part of a corporate group (as defined in Brazilian corporate law); (iii) acquire all shares of a company in order to make such company our wholly-owned subsidiary, or our shareholders sell all of our shares to
another company in order to make us a wholly-owned subsidiary of such company, pursuant to Article 252 of Brazilian corporate law; or (iv) acquire control of any company at an acquisition price that exceeds the limits established under Article
256, paragraph 2 of Brazilian corporate law, our shareholders will not be entitled to withdrawal rights, if our common shares are (a) part of the Bovespa Index or another stock exchange index, as defined by the CVM; and (b) widely held,
such that any controlling shareholders and their affiliates jointly hold less than 50% of the type or series of shares being withdrawn.

The right to withdraw expires 30 days after the publication of the minutes of the relevant shareholders meeting. We are entitled to
reconsider any action giving rise to withdrawal rights for 10 days after the expiration of the above period if we determine that the redemption of the shares of dissenting shareholders would jeopardize our financial situation.



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Article 45 of Brazilian corporate law describes the amounts to be paid to shareholders who
exercise their withdrawal rights. As a general rule, the withdrawing shareholder will receive the value of the shares, based on the most recent audited balance sheet approved by our shareholders, or, if lower, the economic value of the shares, based
on an evaluation report prepared in accordance with Brazilian corporate law. If the resolution giving rise to withdrawal rights is passed more than 60 days after the date of our most recent balance sheet, dissenting shareholders may request that the
shares be valued in accordance with a new balance sheet dated no more than 60 days prior to the date of the resolution. In such case, we are obligated to pay 80% of the share value according to the most recent balance sheet approved by our
shareholders, and the balance within 120 days following the date of the resolution of the shareholders meeting that gave rise to the withdrawal rights.

Liquidation

We may be liquidated in
accordance with the provisions of Brazilian law. In the event of our extrajudicial liquidation, a shareholders meeting will determine the manner of our liquidation, appoint our liquidator and our fiscal council that will function during the
liquidation period.

In the event of our liquidation, the assets available for distribution to our shareholders would be
distributed to our shareholders in an amount equal to their pro rata share of our legal capital. If the assets to be so distributed are insufficient to fully compensate our all of our shareholders for their legal capital, each of our shareholders
would receive a pro rata amount (based on their pro rata share of our legal capital) of any assets available for distribution.

Redemption

According to Brazilian
corporate law, we may redeem our shares pursuant to a resolution adopted at an extraordinary shareholders meeting by shareholders representing at least 50% of our capital stock. The redemption may be paid with our retained earnings, revenue
reserves or capital reserves.

Preemptive Rights

Except as described below, our shareholders have a general preemptive right to participate in any issue of new shares, in proportion to its
holding at such time. However, the conversion of debentures into shares, the granting of options to purchase or subscribe for shares and the issue of shares as a result of the exercise of such options, are not subject to preemptive rights. Our
shareholders are also entitled to preemptive rights in any issue of convertible debentures or offerings of shares or warranties issued by us. Shareholders have a period of at least 30 days after the publication of notice of the issue of shares,
convertible debentures and warrants to exercise their preemptive rights. In addition, such preemptive rights may be transferred or disposed of for value. Under the terms of Article 172 of Brazilian corporate law and our bylaws, our board of
directors may exclude preemptive rights or reduce the exercise period with respect to the issue of new shares, debentures convertible into shares and warrants up to the limit of our authorized share capital, if the distribution of those securities
is conducted in a stock exchange, or through a public offering, an exchange offer for shares or tender offer the purpose of which is to acquire control of another company. See Item 3Key InformationRisk FactorsRisks Relating
to the Offering and Our Common SharesA holder of our common shares not residing in Brazil might be unable to exercise preemptive rights with respect to the common shares for additional information on this matter.

Insider Trading Regulations

We comply
with the restrictions on insider trading set forth in CVM Instruction No. 358, dated January 3, 2002. The following paragraphs contain a brief summary of some of such restrictions.

In issuer, any controlling shareholders, directors, officers and other members of management are prohibited from trading in any securities
issued by our company or derivatives related to such securities, if (i) they are in possession of material information regarding our business, and such information has not been publicly disclosed; (ii) a transaction is pending for the
acquisition or sale of shares of our capital stock, by our company, subsidiaries or affiliates, or an option or mandate has been granted in connection with any of such transactions; or (iii) our company intends to participate in a merger,
consolidation or corporate reorganization, or to spin-off assets or change into a different form of legal entity; and (iv) such trading activity would take place in the 15-day period prior to the filing of our quarterly financial statements
(ITR) or annual financial statements (IAN and DFP) with the CVM.

Individuals who held management positions at the company and gained
access to material information originating from developments occurred before their departure from the company are also prohibited from engaging in such trading activities, from the date of their departure from the company until (i) six months
after their departure; or (ii) public disclosure of the material information; provided that trading will remain prohibited as long as it may interfere with our business or adversely affect our financial condition or that of our shareholders.



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Acquisition of Treasury Stock

An issuer cannot acquire shares of its own capital stock, to hold as treasury stock or for cancellation purposes, if this acquisition would:
(i) reduce the issuers capital stock; (ii) require the use of funds in excess of the issuers profits or available reserves, as described in its most recent balance sheet; (iii) manipulate the stock price, or use of any
unfair trading practice; or (iv) acquire shares that had not been fully paid by the respective holder, or that were owned by any controlling shareholders. Furthermore, an issuer may not acquire shares of its own capital stock if a tender offer
for its shares is pending.

The amount of shares of our capital stock held by our company, or maintained by our affiliates and
subsidiaries in treasury cannot exceed 10% of the total outstanding shares of our capital stock.

We may only purchase shares of our own
capital stock at a stock exchange. Private purchases are only permitted if previously approved by the CVM, or if we have cancelled our registration as a public company with the CVM. We can purchase and sell put and call options on our shares without
restrictions at any time.

Restrictions on Activities Inconsistent with our Corporate Purpose

Any transactions in which we participate that are inconsistent with our corporate purpose are not enforceable against our company, pursuant to
Brazilian corporate law, including any forms of collateral or guarantees unrelated to our corporate purpose or in violation of our bylaws.

Disclosure
of Trading of our Shares by an Issuer, any Controlling Shareholders, Directors, Officers or Members of the Fiscal Council

An
issuers directors and officers and members of its fiscal council, when active, as well as members of any other technical or advisory committee, are required to disclose to its investor relations officer, who will disclose to the CVM and
BM&FBOVESPA, the number and type of securities issued by the issuer, its publicly-held subsidiaries or controlled companies, including derivatives (in case of any controlling shareholders) held by them or by persons related to them, as well as
any alteration in their respective interests within 10 days as from the end of the month in which trading takes place.

In
addition, the Novo Mercado listing rules require any controlling shareholders to provide the same information in relation to securities issued by the issuer, including derivatives, and to disclose their plans for future trading. Information
on trading of an issuers securities should include:



| |  |  | name and identification of the acquirer;
| | - |  | ----------------------------------------



| |  |  | number, price, kind and/or class, in the event of traded shares, or characteristic, in the event of other securities; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | form of acquisition (private transaction, trading on stock exchange, etc).
| | - |  | --------------------------------------------------------------------------

Pursuant to CVM
Instruction No. 358, if an issuers controlling shareholders and/or any person or company, whether individually or together with a group of persons or entities sharing similar interests, should directly or indirectly increase their
interest in an issuers capital stock by at least 5% percent, such persons or entities must disclose to us the following information:



| |  |  | the name and identification of the person providing the information;
| | - |  | --------------------------------------------------------------------



| |  |  | the number, price, kind and/or class, in the event of acquired shares, or characteristics, in the event of other securities;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | form of acquisition (private transaction, trading on stock exchange, etc.);
| | - |  | ---------------------------------------------------------------------------



| |  |  | the reasons and purpose of the transaction; and
| | - |  | -----------------------------------------------



| |  |  | information regarding any agreement regulating the exercise of voting rights or the purchase and sale of our securities.
| | - |  | ------------------------------------------------------------------------------------------------------------------------



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Disclosure of Information

We are subject to the reporting requirements established by Brazilian corporate law and the regulations of the CVM. In addition, as a
result of our listing on the Novo Mercado, we must comply with the disclosure requirements under Novo Mercado regulations.

Information Required by the CVM

Brazilian corporate law, securities regulations of the CVM and the rules for listing on the Novo Mercado require that publicly
held corporations file the following periodic information with the CVM and the BM&FBOVESPA:



| |  |  | financial statements prepared in accordance with Brazilian GAAP and related management and auditors reports, within three months from the end of the fiscal year or on the date on which they are published or made
available to our shareholders, whichever occurs first, together with the Demonstrações Financeiras Padronizadas (a report on a standard form containing relevant financial information derived from our financial statements required to be
filled out by us and filed with the CVM);
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | notices, filed on the same date as their publication, of our annual shareholders meeting;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | a summary of the decisions made at annual shareholders meetings, filed on the day following the meeting;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | a copy of the minutes of the annual shareholders meeting, filed within ten days from the date the meeting is held;
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | ITR, a quarterly report on a standard form containing our relevant quarterly corporate, business and financial information, together with a special review report issued by our independent auditor, filed within 45 days
from the end of each quarter until December 31, 2011 (except for the last quarter of each year) or upon disclosure of such information to shareholders or third parties, whichever occurs first;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Formulário de Referência, filed within five months from the end of each corporate year and in the event a request to conduct public offering is filed with CVM;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Formulário Cadastral, which must be updated within seven business days if any of the information contained therein is modified;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | management report within one month before a shareholders meeting is scheduled to occur, giving notice that certain management documents, as required by Brazilian corporate law, are available to shareholders; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any documents deemed necessary for shareholders to exercise their voting rights.
| | - |  | --------------------------------------------------------------------------------

In addition
to the foregoing, we must also file the following information with the CVM and the BM&FBOVESPA:



| |  |  | notices, filed on the same date of their publication, of our extraordinary or special shareholders meetings;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | a summary of the decisions made at extraordinary or special shareholders meetings, filed on the day following the meeting;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | minutes of our extraordinary or special shareholders meetings, filed within ten days from the date they are held;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | a copy of any shareholders agreement, filed on the date on which it is registered with us;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | any press release giving notice of material facts, filed on the date the release is published in the press;
| | - |  | -----------------------------------------------------------------------------------------------------------



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| |  |  | information on any filing for corporate reorganization, the reason for such filing, special financial statements prepared for obtaining a legal benefit, and, if applicable, any plan for payment of holders of debentures,
as well as copies of any judicial decision granting such request, filed concurrently with the corporate reorganization and on the date we take notice of it;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | information on any bankruptcy filing, on the same day we become aware of it, or the filing of a judicial claim, as applicable;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | a copy of any judicial decision granting a bankruptcy request and appointing a bankruptcy trustee, filed on the date we take notice of it; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | other information as requested by the CVM.
| | - |  | ------------------------------------------

Information Required by the BM&FBOVESPA from Companies
Listed on the Novo Mercado

In addition to the disclosure obligations imposed by Brazilian corporate law and the CVM, we
also must comply with the following additional disclosure requirements under Novo Mercado regulations:



| |  |  | no later than six months following our listing on the Novo Mercado, we must disclose financial statements and consolidated financial statements at the end of each quarter (except the last quarter of each year)
and at the end of each fiscal year, including a cash-flow statement which must indicate, at a minimum, the changes in our cash and cash equivalents, divided into operating, finance and investment cash flows;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | from the date on which we release our financial statements relating to the second fiscal year following our listing on the Novo Mercado we must, no later than four months after the end of the fiscal year:
(i) prepare our annual financial statements and consolidated financial statements, if applicable, in accordance with U.S. GAAP, or IFRS, in Reais or U.S. dollars, in the English language, together with (a) management reports,
(b) notes to the financial statements, including information on net income and shareholders equity calculated at the end of such fiscal year in accordance with Brazilian GAAP, as well as management proposals for allocation of net profits,
and (c) our independent auditors report; or (ii) disclose, in the English language, complete financial statements, management reports and notes to the financial statements, prepared in accordance with Brazilian corporate law,
accompanied by (a) an additional explanatory note regarding the reconciliation of year-end net income and shareholders equity calculated in accordance with Brazilian GAAP and U.S. GAAP or IFRS, as the case may be, which must include the
main differences between the accounting principles used, and (b) the independent auditors report; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | from the date on which we release our first financial statements prepared as provided above, no later than 15 days following the term established by law for the publication of quarterly financial information, we must
disclose, in its entirety, our quarterly financial information translated into the English language or disclose our financial statements and consolidated financial statements in accordance with Brazilian GAAP, U.S. GAAP or IFRS as provided above,
accompanied by the independent auditors report.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, we must disclose the following information together with
our ITR:



| |  |  | our consolidated balance sheet, consolidated statement of operations, and a discussion and analysis of our consolidated performance, if we are obliged to disclose consolidated financial statements at year-end;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any direct or indirect ownership interest exceeding 5% of our capital stock, considering any ultimate individual beneficial owner;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | the number and characteristics, on a consolidated basis, of our shares held directly or indirectly by our principal shareholders, members of our board of directors, board of executive officers and fiscal council;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in the numbers of our shares held by the principal shareholders, members of our board of directors, board of executive officers and fiscal council in the immediately preceding 12 months;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | in an explanatory note, our cash-flow statement and consolidated cash-flow statement, which should indicate the cash flow changes in cash balance and cash equivalent, separated into operating, finance and investment
cash flows;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the number of free-float shares, and their percentage in relation to the total number of issued shares; and
| | - |  | -----------------------------------------------------------------------------------------------------------



| |  |  | the existence of arbitration provision for disputes arising between us and principal shareholders, directors, executive officers and members of the fiscal council before the Market Arbitration Chamber of
BM&FBOVESPA.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following information must also be included in the companys Formulário de
Referência:



| |  |  | information relating to the ownership interest exceeding 5% of our capital stock, number and characteristics, on a consolidated basis, of the companys shares directly or indirectly held by the principal
shareholders and members of the board of directors, executive officers and fiscal council;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in the number of securities held by such persons within the immediately preceding 12 months;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | the number of free-float shares and their respective percentage in relation to the total amount of shares issued; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | submission to arbitration.
| | - |  | --------------------------

Disclosure of Material Information

According to Law No. 6,385, of December 7, 1976, as amended, and the rules published by the CVM, we must disclose any material
information (fato relevante) related to our business to the CVM and the BM&FBOVESPA and publish a notice of such material information. Material information consists of any decision by the principal shareholders, any resolution taken by our board
of directors, by the executive officers or by the shareholders in a shareholders meeting, or any other act or fact of political, technical, managerial, economic or financial nature occurring or related to us that could materially influence the price
of our securities, the decision of investors to buy, sell or hold our securities, or the investors decision to exercise any rights deriving from our securities.

Under special circumstances, we may request confidential treatment by the CVM of certain material developments affecting us.

Going Private Process

A public
company may become a private company if it or any controlling shareholders conduct a public tender offer for the acquisition of all of the issuers outstanding common shares in accordance with the rules and regulations of Brazilian corporate
law, the CVM and the Novo Mercado listing segment which, among other things, require that the offering price be the fair value of our common shares, as defined pursuant to a valuation report, and that holders of common shares representing
more than two thirds of the outstanding common shares should have agreed to the delisting or accepted the offer; provided, however, that for such purposes outstanding common shares shall mean common shares the holders of which shall have enrolled to
participate in the offer.

The minimum offering price shall correspond to the fair value of our common shares, as determined in a
valuation report prepared by specialized and independent firm of recognized experience.

Pursuant to Brazilian corporate law, fair value
is defined as the valuation of our Company, determined based on individually or in the aggregate, shareholders equity, shareholders equity valued at market price, discounted cash flow, comparison by multiples, the market price of shares
issued by us, or any other valuation method accepted by the CVM. Shareholders holding at least 10.0% of our outstanding common shares may require our management to call a special shareholders meeting to determine whether to perform another
valuation using the same or a different valuation method. This request must be made within 15 days following the disclosure of the price to be paid for the common shares in the public offering. The shareholders that make such request, as well as
those voting in its favor, must reimburse us for any costs involved in preparing the new valuation, if the new valuation price is not higher than the original valuation price. If the new valuation price is higher than the original valuation price,
the public offering must either be cancelled or carried out at the higher price, and this decision must also be disclosed to the market.



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Pursuant to our bylaws and the Novo Mercado listing rules, the minimum price per
share in the public offer to be conducted to purchase our outstanding common shares for purposes of going private, must correspond to the fair value of our common shares as determined in a valuation report prepared by a specialized and independent
firm of recognized experience, chosen at a shareholders meeting from a list of three institutions presented by our board of directors, pursuant to a decision of our Company, our directors and officers and/or shareholders.

Delisting from theNovo Mercado

We may at any time delist our common shares from the Novo Mercado, provided that shareholders representing the majority of our
common shares approve the action and that we give at least 30 days written notice to the BM&FBOVESPA. Our delisting from the Novo Mercado would not result in the loss of our registration as a public company with the BM&FBOVESPA.

If the shareholders meeting decides to delist in order for an issuers common shares to be tradable outside the
Novo Mercado, or as a result of a corporate reorganization in which the surviving company is not listed on the Novo Mercado, the issuers controlling shareholders or group of controlling shareholders should conduct a tender offer
to purchase the issuers outstanding common shares. In any such event, the offering price per common share should be no less than the fair value of our common shares, as determined in a valuation report prepared by a specialized and independent
firm of recognized experience, chosen at a shareholders meeting from a list of three institutions presented by our board of directors, pursuant to a decision of shareholders representing at least the majority of the issuers outstanding
shares present at such a shareholders meeting, with blank votes not taken into account and with one vote entitled to each share. All the expenses and costs incurred in connection with the preparation of the valuation report must be paid by any
controlling shareholders and/or the issuer, as offerors.

In the event of delisting from the Novo Mercado, any
controlling shareholders must conduct a tender offer to acquire common shares from the other shareholders at fair value, pursuant to the Novo Mercado listing rules and according to applicable legislation and regulation. Such tender offer must
be disclosed to the BM&FBOVESPA and the market immediately after the company receives notice regarding the termination of the agreement for participation in the Novo Mercado listing segment.

According to the Novo Mercado listing rules, in the event of a transfer of our control within 12 months following our delisting
from the Novo Mercado, the acquirer of control and the seller of control must offer to purchase the common shares of all other holders of our common shares for the same price, terms and conditions offered to the seller of control, adjusted
for inflation. Furthermore, in the event the price received by any controlling shareholders for their common shares is higher than the value of the public offering conducted, the selling controlling shareholders and the acquirer will be required to
jointly pay the difference to the acceptors of the respective public offering.

If our common shares are delisted from the
Novo Mercado, we will not be permitted to have common shares listed on the Novo Mercado for a two-year period following the delisting date, unless there is a change in our control following this delisting from the Novo
Mercado.

Public Tender Offers

Our by-laws provide that if any of the above-mentioned cases occur simultaneously, a single public tender offer will be conducted provided that
the procedures of all types of public tender offers are compatible, the target shareholders are not adversely affected and the CVM authorizes it.

In addition, our by-laws permit that we or the shareholders responsible for the public tender offer assure its execution through any
shareholder, third party and, if applicable, ourselves. Nevertheless, we or the responsible shareholder, as the case may be, are still responsible for the public tender offer until its completion.

Arbitration

We, our shareholders,
our directors and officers, and the members of our fiscal council, when active, should submit to arbitration for any dispute relating to the application, legality, effectiveness, interpretation, violation and effects of violation of the provisions
in the agreement for participation in the Novo Mercado listing segment, and to the Novo Mercado listing rules, the arbitration regulation instituted by the BM&FBOVESPA, the provisions of Brazilian corporate law, our bylaws, the
rules of the CMN and the Central Bank, the regulations of the CVM and the BM&FBOVESPA and other rules generally applying to the Brazilian capital markets. Any such dispute should be settled by arbitration carried out before BM&FBOVESPA
Arbitration Chamber.



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Change of Control

According to the Novo Mercado listing rules, the sale of control over an issuer, in one transaction or in a series of successive
transactions should contemplate an obligation by the acquirer of control to conduct a tender offer for the acquisition of all other outstanding common shares on the same terms and conditions offered for disposition of control so as to assure equal
treatment among all of our shareholders. For such purposes, any selling controlling shareholders and the acquirer shall inform the CVM and the BM&FBOVESPA of the price and other conditions of such sale.

A tender offer is also required:



| |  |  | when there is a significant assignment of share subscription rights or rights in other securities convertible into an issuers common shares, which results in the transfer of its control;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in case of an indirect transfer of an issuers control, through a transfer of control over any controlling shareholders; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | in case a shareholder acquires the issuers control pursuant to a private transaction for purchase of its common shares. In this event, the acquiring shareholder must conduct a tender offer for the acquisition of
all the issuers outstanding common shares on the same terms and conditions offered disposition of control and must also reimburse the counterparties from whom it has acquired its common shares on the stock exchange in the six-month period
preceding the transaction that resulted in a change in control. The reimbursement amount corresponds to the positive difference between the price paid to the seller of control and the adjusted price paid in transactions carried out on the stock
exchange during this six-month period.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The buyer, if applicable, should take all necessary measures to reconstitute the
minimum 25.0% free float within six months of the acquisition.

The controlling shareholders may not transfer the common shares to
the purchaser of our control, and the issuer may not register the transfer of such common shares, if the buyer fails to execute the controlling shareholders consent agreement (Termo de Anuência dos Controladores). Moreover, the
issuer will not register any shareholders agreement that regulates the exercise of control rights until the signatories thereto execute the controlling shareholders consent agreement.

Diffused Control

Control of us is deemed
diffused if exercised by (i) a shareholder holding less than 50% of our capital stock; (ii) shareholders jointly holding more than 50% of our capital stock, provided that each shareholder holds less than 50% of our capital stock, and
(a) their respective ownership of our common shares is not subject to voting rights agreement, (b) they are not under common control and (c) do not represent a common interest; and (iii) shareholders holding less than 50% of our
capital stock who have executed a shareholders agreement in respect of their ownership of our common shares.

Duties and Responsibilities of
Controlling and Others Shareholders

If one shareholder or group of shareholders exercises in a permanent manner control over us, such
shareholder or group of shareholders will be subject to the duties and responsibilities of the Brazilian corporate law. On the other hand, if there is no such shareholder or group of shareholders, we will be subject to diffused control. The diffused
control is always transitory and shareholders can exercise their control over us by using their voting rights, if there are shareholders in a sufficient number who can influence the decisions taken at a general shareholders meeting. If our control
is diffused according to the Brazilian corporate law, there are no specific liability rules for each group of shareholders even if one shareholder or group of shareholder effectively exercises the diffused control, since this diffused control is
exercised with the approval of the other shareholders. Nevertheless, the rules concerning shareholders liability, such as in abuse of voting rights and conflict of interests, apply to any company, including those with diffused control.

In addition, the rules of the Novo Mercado acknowledge that diffused control can involve a specific controlling shareholder,
which is the one who actually exercises it. The rules of the Novo Mercado also acknowledge the specific liability of a certain shareholder or group of shareholders for misconduct.



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According to the definition of diffused control, certain obligations and responsibilities
apply to certain groups of shareholders who are not necessarily identified as controlling shareholders, such as the obligation to conduct a tender offer if such group of shareholders votes for delisting from the Novo Mercado or if delisting
occurs due to non-compliance with the obligations of the Novo Mercado listing segment regulations. Therefore, if our control becomes diffused, all shareholders will be subject to the liability rules set forth in the Brazilian corporate law.
However, some specific rules and liabilities set forth in the Novo Mercado listing segment regulations only apply for those shareholders who have the power to control our business, even though not formally identified as controlling
shareholders.

Protection against Shareholder Concentration

Our by-laws contain a provision intended to avoid concentration of our shares in the hands of a small group of investors. This provision
requires that any shareholder who becomes an owner of our common shares, or certain other rights, in an amount greater than or equal to 20% of our total capital stock (excluding any involuntary ownership interest additions arising from the
cancellation of treasury shares or capital decrease resulting from the cancellation of shares), within 60 days from the date of acquisition, is required to publicly tender for all of our capital stock. Cresud, including the entities controlled by it
or under its common control and their legal successors (but excluding any acquirer of shares from Cresud and its successors) are not covered under this obligation, which applies only to investors who acquired our shares after our listing in the
Novo Mercado segment of BM&FBOVESPA as of April 2006.

The percentage of 20% is not applicable to a person who becomes
the holder of our shares in a number greater than 20% of the total shares as a result of (i) legal succession, provided that the shareholder sells the exceeding shares no later than 60 days as from the material event; (ii) merger of
another company into our company; (iii) merger of shares of another company into our company; or (iv) subscription of shares, conducted in a primary offering, approved at the shareholders meeting, called by our board of directors, which
proposal for capital increase has determined the share price based on the economical value calculated according to an economical and financial appraisal report conducted by a specialized company with renowned experience in publicly held companies.

Shareholders that acquire 20% of our common shares are obligated under this provision to: (i) make a tender offer to acquire the
entirety our outstanding issued shares; (ii) ensure that the tender offer is conducted in an auction held at BM&FBOVESPA, (iii) offer to pay a price per share as described below, and (iv) offer to pay cash in exchange for the
shares, in Brazilian Reais.

The tender offer price per share issued, provided that CVM regulations do not require the adoption of
calculation criteria that would lead to a greater acquisition price, in which case, such CVM criteria would prevail, shall not be less than the higher amount among: (i) the market value of our share established in an expert valuation report
prepared and approved by shareholders in accordance with our bylaws; (ii) 150% of the share price established in the most recent capital increase made through public offering within the 24-month period preceding the date on which the tender
offer becomes mandatory, adjusted by the IPC-A index pro rata until actual payment; or (iii) 150% of the average listing price of our shares during the 90-day period preceding the tender offer on the stock exchange where they are mostly
traded.

Launch of such a tender offer does not preclude other shareholders, or even us, from launching a competing tender offer in
accordance with the applicable regulations.

In the event the acquiring shareholder fails to perform the obligations set forth in our
bylaws, our board of directors shall call a special shareholders meeting to approve the suspension of the shareholder rights of such defaulting shareholder, without prejudice to losses and damages that may be claimed from it.

Any proposed amendment to limit our shareholders right to conduct a tender offer or to exclude it will impose on the shareholder(s)
voting in favor of said amendment or exclusion at such shareholders meeting, the obligation of conducting such tender offer. Each shareholder shall have the right to one vote in any special shareholders meeting called to decide on
amendments or elimination of such provisions of our bylaws.

Suspension of Rights of Acquiring Shareholders for Violation of Our Bylaws

In the event an acquiring shareholder violates the provisions of our by-laws regarding the need to conduct a public tender offer in the event
of a change of our control or the acquisition of shares representing 15% or more of our common shares, the rights of such acquiring shareholder will be suspended pursuant to a resolution passed at our shareholders meeting, which must be
convened in the event of such noncompliance. The acquiring shareholder will not be entitled to vote at such meeting.



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Public Meeting with Analysts

Pursuant to Novo Mercado regulations, at least once a year we must hold a public meeting with analysts and any other interested
parties to disclose information regarding our projects and forecasts, as well as our economic and financial situation.

Annual Calendar

Pursuant to the Novo Mercado regulations, we must, by the end of January of each year, publicly disclose and send to the
BM&FBOVESPA an annual calendar with a schedule of our corporate events. Any subsequent modification to such schedule must be immediately and publicly disclosed and sent to the BM&FBOVESPA.

Duty to Disclose Related Party Transactions

Pursuant to the Novo Mercado regulations, we must publicly disclose and send to the BM&FBOVESPA information about any
contract between us and our related parties or managers of our related parties, whenever the amount of such contract in any one-year period reaches the greater of R$0.2 million or 1.0% of our shareholders equity.

The disclosure must specify the contracts object, term, amount, termination conditions and impact, if any, on our business and
management.

Additionally, pursuant to CVM rules, in the event a related party has interest in the approval of any matter by our
shareholders at a shareholders meeting, we must inform our shareholders of at least: the name and qualifications of the related party; the relationship between us and the related party; the amount of our common shares and other securities,
directly or indirectly, held by the related party; all credits and amounts outstanding between us and the related party; a description of the transaction submitted to shareholders meeting approval; managements recommendation in relation
to the proposed related party transaction, indicating our advantages and disadvantages; and, in the event of an intercompany transaction, an affirmation by our management that the transaction was conducted at an arms-length basis or that the
compensation is appropriate, and analysis of the related party transactions terms and conditions in relation to the terms and conditions of similar transactions entered into by third parties. See Item 7Major Shareholders and
Related Party Transactions.

Description of Outstanding Warrants

On March 15, 2006, our board of directors approved the issue to our founding shareholders of two series of warrants to acquire our common
shares. The first series of such warrants, or First Series Warrants, consists of 256,000 warrants, and the second series, or the Second Series Warrants, consists of an additional 256,000 warrants. Such warrants were delivered
to our founding shareholders in proportion to their respective interests in our capital stock on the date such warrants were issued. The First Series Warrants grant their holders the right to acquire such number of our common shares as will
represent 20% of our total capital stock on the date such warrants are exercised, and the Second Series Warrants grant their holders the right to acquire such number of our common shares as will represent an additional 20% of our total capital stock
on the date such warrants are exercised. We believe that these warrants are an incentive and contribute to ensure our founding shareholders commitment towards the development of our activities and the implementation of the business plan
prepared by them.

First Series Warrants

The First Series Warrants will grant their holders the right to acquire our common shares at an exercise price of R$1,000 per share which was
the issue price per share in our 2006 initial public offering, subject to the price adjustment described below.

We believe that the First
Series Warrants represent an efficient mechanism of compensating our founding shareholders as those securities will only represent an economic gain in a scenario of a rising share price for our shares. The remuneration provided by the First Series
Warrants will not interfere with our results or financial condition as a gain to our founding shareholders will be generated by market conditions. The principal terms of the First Series Warrants are as follows:

Series and Right to Acquire Common Shares

The First Series Warrants were issued in three sub-series, which differ in relation to the date on which their respective rights to
acquire shares becomes effective. All three sub-series of the First Series Warrants are currently exercisable and tradable. The First Series Warrants expire on the date 15 years after the publication in Brazil of the notice of completion of our
initial public offering (Anúncio de Encerramento), which notice was published on May 15, 2006.



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Warrant Shares

Each lot of 1,000 warrants of the First Series Warrants originally entitled its respective holder to acquire one of our common shares, subject
to the adjustments described in Item 10Additional InformationAdjustment of the Number of Common Shares for Subscription below.

Adjustment of the Number of Common Shares for Subscription

If we issue shares that do not result from the exercise of the rights conferred under the warrants, the number of shares to which the warrants
grant rights will be adjusted. Such increase in the number of shares that may be acquired by the holders of the warrants shall be proportional to such number of shares newly issued by us in relation to the number of shares existing before such
issuance. Accordingly, holders of warrants whose rights had not yet been exercised shall be entitled to maintain the right to subscribe the same percentage interest in our capital stock as they were entitled to prior to such new issuance. The number
of shares granted upon the exercise of the warrants will also be adjusted in order to reflect capital reductions, stock splits, reverse stock splits and share bonuses transactions, if any. Such adjustments will also apply to the issue of new
warrants, debentures or other securities convertible into our common shares.

Exercise Price

The exercise price of the First Series Warrants was originally equivalent to the issue price per share in our 2006 initial public offering,
i.e., R$1,000.00 per share. However, such exercise price is subject to certain adjustments and restatements as set forth at our board of directors meeting held on March 15, 2006.

If new shares that do not result from the exercise of our warrants are issued, the exercise price of the warrants shall be adjusted to reflect
the price per share of such subsequent offerings. Such calculation will be made based on: (i) the total amount in Reais of our capital stock after our 2006 initial public offering, excluding amounts relating to retained profits converted into
equity, plus (ii) the total proceeds in Reais received by us from any subsequent issuance of shares after our 2006 initial public offering that do not result from any exercise of our warrants, divided by (iii) the total number of shares
outstanding after our 2006 initial public offering in addition to the shares issued thereafter, not including any shares issued as a result of any exercise of our warrants. The exercise price resulting from the application of such rules is also
subject to the adjustment procedures set forth in the following paragraph.

Exercise Price Adjustment

For purposes of adjustment of the exercise price of the First Series Warrants, the amounts set forth in items (1) and (2) in the
paragraph above shall be adjusted, respectively, from (a) the date of the announcement of commencement of our 2006 initial public offering and (b) the date of each new issuance of shares made by us that does not result from any exercise of
our warrants, based on the Compounded Consumer Price Index (IPC-A), during the period, if such periods are equal to or longer than 12 months. On June 30, 2014, the exercise price of the First Series Warrants was R$15.36 per share.

Exercise of Rights

The First Series Warrants may be exercised by their holders upon at least five business day advance notice to us.

Characteristics of the Common Shares for Subscription

The shares to be acquired pursuant to the First Series Warrants will be entitled to the same rights granted to other shares.

Holders of First Series Warrants

As of September 30, 2014, the holders of our First Series Warrants are:



|                |  |        |         |  |   |  |       | 
|--------------- |  | ------ | ------- |  | - |  | ----- | 
|Holder          |  | Number |         |  | % | 
|Agro Investment |  |        | 7,471   |  |   |  | 2.92  | 
|Agro Managers   |  |        | 4,364   |  |   |  | 1.70  | 
|Cape Town LLC   |  |        | 64,000  |  |   |  | 25.00 | 
|Cresud          |  |        | 177,004 |  |   |  | 69.14 | 
|                |  |        |         |  |   |  |       | 
|Total           |  |        | 256,000 |  |   |  | 100   | 
|                |  |        |         |  |   |  |       | 



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Second Series Warrants

The Second Series Warrants grant their holders the right to acquire our common shares only in the event of (I) a transfer of
control in accordance with our bylaws, the Novo Mercado listing regulations and CVM rules, (II) the acquisition of a significant interest in our capital stock in accordance with our bylaws, or (III) a mandatory tender offer in accordance with
CVM regulations. In any of these events, a tender offer for the acquisition of all of our shares must be made. The exercise price for the shares underlying the Second Series Warrants will be equal to the price established in such tender offer.

The purpose of creating the Second Series Warrants was to provide our founding shareholders with a mechanism that would allow them
under certain circumstances to maintain their interest in our capital stock. The principal terms of the Second Series Warrants are described below.

Series and Right to Acquire Common Shares

The Second Series Warrants were issued on March 15, 2006. The Second Series Warrants expire on the date 15 years after the
publication in Brazil of the notice of completion of our initial public offering (Anúncio de Encerramento), which notice was published on May 15, 2006. The Second Series Warrants may be exercised by their holders only under the
following circumstances:

Transfer of control: In the event of a transfer of control of our company, as prescribed by
articles 41, 42 and 43 of our by-laws, the Novo Mercado listing regulations and CVM rules, provided that the resulting business or business group has no direct participation of our founding shareholders or persons related to them. The Second
Series Warrants in this case must be exercised within ten business days of the publication of the tender offer made in connection with such transfer of control.

Acquisition of significant interest: In the event of an acquisition by any shareholder, individually or jointly with other
shareholders, of an interest in our company representing an amount equal to or greater than 20% of our capital stock, as prescribed by article 44 of our by-laws, provided that the resulting business or business group has no direct participation of
our founding shareholders or persons related to them. The Second Series Warrants in this case must be exercised within ten business days of the publication of the tender offer made in connection with such acquisition of a significant interest.

Mandatory tender offer in accordance with CVM rules: In the event a mandatory tender offer is made for our shares under CVM
regulations, provided that the resulting business or business group has no direct participation of our founding shareholders or persons related to them. The Second Series Warrants in this case must be exercised within ten business days of the
publication of such mandatory tender offer.

Transferability

The Second Series Warrants may be transferred only among our founding shareholders, their controlling shareholder or their affiliates.

Warrant Shares

Each lot of 1,000 warrants of the Second Series Warrants originally entitled its respective holder to acquire one of our common shares, subject
to the adjustments described in Item 10Additional InformationAdjustment of the Number of Common Shares for Subscription below.

Adjustment of the Number of Common Shares for Subscription

If we issue shares that do not result from the exercise of the rights conferred under the warrants, the number of shares to be issued upon
exercise of the warrants will be adjusted. Such increase in the number of shares that may be subscribed by the holders of the warrants shall be proportional to such number of shares newly issued by us in relation to the number of shares existing
before such issuance. Accordingly, holders of warrants whose preemptive rights had not yet been exercised shall be entitled to maintain the right to subscribe the same percentage interest in our capital stock as they were entitled to prior to such
new issuance. The number of shares granted upon the exercise of the warrants will also be adjusted in order to reflect capital reductions, stock splits, reverse stock splits and share bonuses transactions, if any. Such adjustments will also apply to
the issue of new warrants, debentures or other securities convertible into our common shares.



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Exercise Price

The exercise price of the Second Series Warrants will be equal to the tender offer prices described above under Second Series
Warrants.

Exercise of Rights

The right conferred by the Second Series Warrants may be exercised by their holders by sending notice to us within ten business days from the
date of the public announcement of the applicable tender offer. The Second Series Warrants may be exercised only if our founding shareholders continue to own in the aggregate at least 80% of the number of shares held by them immediately after
consummation of our 2006 initial public offering. On the date hereof, our founding shareholders own 100% of the number of shares they held immediately after the consummation of our 2006 initial public offering.

Characteristics of the Common Shares for Subscription

The shares to be acquired under the Second Series Warrants will be entitled to the same rights granted to our other shares.

Holders of Second Series Warrants

As of the date of this Annual Report, the holders of our Second Series Warrants are:



|                |  |        |         |  |   |  |       | 
|--------------- |  | ------ | ------- |  | - |  | ----- | 
|Holder          |  | Number |         |  | % | 
|Agro Investment |  |        | 7,471   |  |   |  | 2.92  | 
|Agro Managers   |  |        | 4,364   |  |   |  | 1.70  | 
|Cape Town LLC   |  |        | 64,000  |  |   |  | 25.00 | 
|Cresud          |  |        | 177,004 |  |   |  | 69.14 | 
|                |  |        |         |  |   |  |       | 
|Total           |  |        | 256,000 |  |   |  | 100   | 
|                |  |        |         |  |   |  |       | 

Adjustment in the Event of a Corporate Restructuring

In the event of any corporate restructuring or similar action, apart from such events mentioned above and which may have an impact on or
represent a reduction of the rights of the holders of the First Series Warrants or the Second Series Warrants, it is stipulated in the meeting of our board of directors held on March 15, 2006 that we shall use our best efforts to negotiate with
the holders of the First Series Warrants and Second Series Warrants, as appropriate, to set forth new exercise conditions, seeking to preserve the rights originally granted to the holders of such warrants, their economic and corporate value, the
amount of underlying shares and their exercise price. For the purpose of such negotiation, decisions on the part of the holders of the warrants shall be determined through a majority vote, and the holders of the First Series Warrants and the Second
Series Warrants shall negotiate and vote separately. Any disputes will be submitted to the Arbitration Chamber of the BM&FBOVESPA (Câmara de Arbitragem do Mercado) pursuant to our bylaws.

C.Material Contracts

See
Item 4Information on the CompanyBusiness OverviewMaterial Agreements.

D.Exchange Controls

There are no restrictions on ownership or voting of our capital stock by individuals or legal entities domiciled outside Brazil. However, the
right to convert dividend payments, interest on shareholders equity payments and proceeds from the sale of our capital stock into foreign currency and to remit such amounts outside Brazil is subject to restrictions under foreign investment
legislation and foreign exchange regulations, which generally require, among other things, the registration of the relevant investment with the Central Bank and the CVM.



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Investments in our common shares by (I) a holder not deemed to be domiciled in Brazil for
Brazilian tax purposes, (II) a non-Brazilian holder who is registered with the CVM under Resolution No. 2,689, or (III) the depositary, are eligible for registration with the Central Bank. This registration (the amount so registered is referred
to as registered capital) allows the remittance outside Brazil of foreign currency, converted at the commercial market rate, acquired with the proceeds of distributions on, and amounts realized through, dispositions of our common shares. The
registered capital per common share purchased in the form of an American Depositary Security or ADS, or purchased in Brazil and deposited with the depositary in exchange for an ADS, will be equal to its purchase price (stated in U.S. dollars). The
registered capital per common share withdrawn upon cancellation of a Common ADS will be the U.S. dollar equivalent of (1) the average price of a common share on the BM&FBOVESPA on the day of withdrawal, or (2) if no common shares were
traded on that day, the average price on the BM&FBOVESPA in the 15 trading sessions immediately preceding such withdrawal. The U.S. dollar equivalent will be determined on the basis of the average commercial market rates quoted by the Central
Bank on the relevant dates.

Annex V Regulations

Resolution No. 1,927 of the National Monetary Council, as amended, provides for the issuance of depositary receipts in foreign markets in
respect of shares of Brazilian issuers. It restates and amends Annex V to Resolution No. 1,289 of the National Monetary Council, known as the Annex V Regulations. The ADS program was approved under the Annex V Regulations by the Central Bank
and the CVM prior to the issuance of the ADSs. Accordingly, the proceeds from the sale of ADSs by ADR holders outside Brazil are not subject to Brazilian foreign investment controls, and holders of the ADSs who are not resident in a Tax Haven
Jurisdiction are entitled to favorable tax treatment. See Item 10Additional InformationTaxationBrazilianTax Considerations.

We pay dividends and other cash distributions with respect to our common shares in Reais. We have obtained an electronic certificate of
foreign capital registration from the Central Bank in the name of the depositary with respect to our ADSs to be maintained by the custodian on behalf of the depositary. Pursuant to this registration, the custodian is able to convert dividends and
other distributions with respect to our common shares represented by ADSs into foreign currency and remit the proceeds outside Brazil to the depositary so that the depositary may distribute these proceeds to the holders of record of the ADSs.

Investors residing outside Brazil may register their investments in our shares as foreign portfolio investments under Resolution
No. 2,689 (described below) or as foreign direct investments under Law No. 4,131 (described below). Registration under Resolution No. 2,689 or Law No. 4,131 generally enables non-Brazilian investors to convert dividends, other
distributions and sales proceeds received in connection with registered investments into foreign currency and to remit such amounts outside Brazil. Registration under Resolution No. 2,689 affords favorable tax treatment to non-Brazilian
portfolio investors who are not resident in a Tax Haven Jurisdiction. See Item 10Additional InformationTaxationBrazilian Tax Considerations.

In the event that a holder of ADSs exchanges those ADSs for the underlying common shares or preferred shares, the holder must:



| |  |  | sell those shares on the BM&FBOVESPA and rely on the depositarys electronic registration for five business days from the date of exchange to obtain and remit U.S. dollars outside Brazil upon the holders
sale of our preferred shares;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | convert its investment in those shares into a foreign portfolio investment under Resolution No. 2,689; or
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | convert its investment in those shares into a direct foreign investment under Law No. 4,131.
| | - |  | --------------------------------------------------------------------------------------------

The custodian is authorized to update the depositarys electronic registration to reflect conversions of ADSs into foreign portfolio
investments under Resolution No. 2,689.

If a holder of ADSs elects to convert its ADSs into a foreign direct investment under Law
No. 4,131, the conversion will be effected by the Central Bank after receipt of an electronic request from the custodian with details of the transaction. If a foreign direct investor under Law No. 4,131 elects to deposit its common shares
or preferred shares into the relevant ADR program in exchange for ADSs, such holder will be required to present to the custodian evidence of payment of capital gains taxes. The conversion will be effected by the Central Bank after receipt of an
electronic request from the custodian with details of the transaction. See Item 10Additional InformationTaxationBrazilian Tax Considerations for details of the tax consequences to an investor residing outside Brazil of
investing in our common shares or preferred shares in Brazil.

If a holder of ADSs wishes to convert its investment in our shares into
either a foreign portfolio investment under Resolution No. 2,689 or a foreign direct investment under Law No. 4,131, it should begin the process of obtaining its own foreign investor registration with the Central Bank or with the CVM, as
the case may be, in advance of exchanging the ADSs for the underlying common shares or preferred shares. A non-Brazilian holder of common shares may experience delays in obtaining a foreign investor registration, which may delay remittances outside
Brazil, which may in turn adversely affect the amount, in U.S. dollars, received by the non-Brazilian holder.



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Unless the holder has registered its investment with the Central Bank, the holder may not be able
to convert the proceeds from the disposition of, or distributions with respect to, such common shares or preferred shares into foreign currency or remit those proceeds outside Brazil. In addition, if the non-Brazilian investor resides in a Tax Haven
Jurisdiction or is not an investor registered under Resolution No. 2,689, the investor will be subject to less favorable tax treatment than a holder of ADSs. See Item 10Additional InformationTaxationBrazilian Tax
Considerations.

Resolution 2,689

All investments made by a non-Brazilian investor under Resolution No. 2,689 are subject to an electronic registration with the Central
Bank. This registration permits non-Brazilian investors to convert dividend payments, interest on shareholders equity payments and proceeds from the sale of our share capital into foreign currency and to remit such amounts outside Brazil.

Under Resolution No. 2,689, non-Brazilian investors registered with the CVM may invest in almost all financial assets and engage in
almost all transactions available to Brazilian investors in the Brazilian financial and capital markets without obtaining a separate Central Bank registration for each transaction, provided that certain requirements are fulfilled. Under Resolution
No. 2,689, the definition of a non-Brazilian investor includes individuals, legal entities, mutual funds and other collective investment entities, domiciled or headquartered outside Brazil.

Pursuant to Resolution No. 2,689, non-Brazilian investors must:



| |  |  | appoint at least one representative in Brazil with powers to take action relating to its investments;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | appoint an authorized custodian in Brazil for its investments, which must be a financial institution duly authorized by the Central Bank and CVM;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | complete the appropriate foreign investor registration forms;
| | - |  | -------------------------------------------------------------



| |  |  | register as a non-Brazilian investor with the CVM;
| | - |  | --------------------------------------------------



| |  |  | register its investments with the Central Bank; and
| | - |  | ---------------------------------------------------



| |  |  | obtain a taxpayer identification number from the Brazilian federal tax authorities.
| | - |  | -----------------------------------------------------------------------------------

The
securities and other financial assets held by a non-Brazilian investor pursuant to Resolution No. 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM or be
registered in registration, clearing and custody systems authorized by the Central Bank or by the CVM. In addition, the trading of securities held under Resolution No. 2,689 is restricted to transactions carried out on stock exchanges or
through organized over-the-counter markets licensed by the CVM.

The offshore transfer or assignment of the securities or other financial
assets held by non-Brazilian investors pursuant to Resolution No. 2,689 are prohibited, except for transfers resulting from a corporate reorganization effected abroad by a non-Brazilian investor, or occurring upon the death of an investor by
operation of law or will.

Law 4,131

To obtain a certificate of foreign capital registration from the Central Bank under Law No. 4,131, a foreign direct investor must:



| |  |  | register as a foreign direct investor with the Central Bank;
| | - |  | ------------------------------------------------------------



| |  |  | obtain a taxpayer identification number from the Brazilian tax authorities;
| | - |  | ---------------------------------------------------------------------------



| |  |  | appoint a tax representative in Brazil; and
| | - |  | -------------------------------------------



| |  |  | appoint a representative in Brazil for service of process in respect of suits based on the Brazilian corporate law.
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Foreign direct investors under Law No. 4,131 may sell their shares in either private or open
market transactions, but these investors will generally be subject to less favorable tax treatment on gains with respect to our common or preferred shares. See Item 10Additional InformationTaxationBrazilian Tax
Considerations.

E.Taxation

The following discussion contains a description of the material Brazilian and U.S. federal income tax consequences of the acquisition,
ownership and disposition of our common shares or ADSs. The following discussion does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, hold or dispose of our common shares or
ADSs. This discussion is based upon the tax laws of Brazil and the United States and regulations under these tax laws as currently in effect, which are subject to change.

Although there is at present no income tax treaty between Brazil and the United States, the tax authorities of the two countries have had
discussions that may culminate in such a treaty. No assurance can be given, however, as to whether or when a treaty will enter into force or how it will affect the U.S. holders of our common shares or ADSs.

Prospective purchasers of our common shares or ADSs should consult their own tax advisors as to the tax consequences of the acquisition,
ownership and disposition of our common shares or ADSs in their particular circumstances.

Brazilian Tax Considerations

The following discussion contains a description of the material Brazilian tax consequences, subject to the limitations set forth herein, of the
acquisition, ownership and disposition of our common shares or ADSs by a holder not deemed to be domiciled in Brazil for purposes of Brazilian taxation, or a Non-Resident Holder. This discussion is based on the tax laws of Brazil and regulations
thereunder in effect on the date hereof, which are subject to change (possibly with retroactive effect). This discussion does not specifically address all of the Brazilian tax considerations that may be applicable to any particular Non-Resident
Holder. Therefore, each Non-Resident Holder should consult its own tax advisor about the Brazilian tax consequences of an investment in our common shares or ADSs.

Individuals domiciled in Brazil and Brazilian companies are taxed in Brazil on the basis of their worldwide income which includes earnings of
Brazilian companies foreign subsidiaries, branches and affiliates. The earnings of branches of foreign companies and non-Brazilian residents, or nonresidents, in general are taxed in Brazil only on income derived from Brazilian sources.

Dividends

Dividends paid by a Brazilian
corporation, such as us, including stock dividends and other dividends paid to a Non-Resident Holder of our common shares or ADSs, are currently not subject to income tax withholding in Brazil to the extent that such amounts are related to profits
generated after January 1, 1996. Dividends paid from profits generated before January 1, 1996 may be subject to Brazilian income tax withholding at varying rates, according to the tax legislation applicable to each corresponding year.

Interest on Shareholders Equity

Law No. 9,249, dated December 26, 1995, as amended, allows a Brazilian corporation, such as us, to make distributions to shareholders
of interest on shareholders equity, and treat those payments as a deductible expense for purposes of calculating Brazilian corporate income tax, and, since 1997, social contribution on net profit as well, as long as the limits described below
are observed. These distributions may be paid in cash. For tax purposes, the deductible amount of this interest is limited to the daily pro rata variation of the TJLP, as determined by the Brazilian Central Bank from time to time, and the amount of
the deduction may not exceed the greater of:



| |  |  | 50% of net income (after the deduction of social contribution on net profit but before taking into account the provision for corporate income tax and the amounts attributable to shareholders as interest on
shareholders equity) for the period in respect of which the payment is made; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 50% of the sum of retained profits and income reserves as of the date of the beginning of the period in respect of which the payment is made.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



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Payment of interest on shareholders equity to a Non-Resident Holder is subject to
withholding income tax at the rate of 15%, or 25% if the Non-Resident Holder is domiciled in (i) a country or location that does not impose income tax, or (ii) where the maximum income tax rate is lower than 20.0%, or (iii) a Tax
Haven Jurisdiction. See Interpretation of the Discussion of the Definition of Tax Haven Jurisdictions below.

These payments of interest on shareholders equity to a Non-Resident Holder may be included, at their net value, as part of any mandatory
dividend. To the extent payment of interest on shareholders equity is so included, we are required to distribute to shareholders an additional amount to ensure that the net amount received by them, after payment of the applicable income tax
withholding, plus the amount of declared dividends, is at least equal to the mandatory dividend.

Payments of interest on
shareholders equity are decided by our shareholders, at our annual shareholders meeting, on the basis of recommendations of our board of directors. No assurance can be given that our board of directors will not recommend that future
distributions of profits should be made by means of interest on shareholders equity instead of by means of dividends.

Taxation of Gains

Under Law No. 10,833, enacted on December 29, 2003, the gain on the disposition or sale of assets located in Brazil by a Non-Resident Holder, whether to another non-Brazilian resident or to a Brazilian resident, may be subject to income tax withholding in Brazil.

With respect to the disposition of our common shares, as they are assets located in Brazil, the Non-Resident Holder should be subject to
income tax on the gains assessed, following the rules described below, regardless of whether the transactions are conducted in Brazil or with a Brazilian resident.

With respect to our ADSs, although the matter is not entirely clear, arguably the gains realized by a Non-Resident Holder upon the disposition
of ADSs to another non-Brazilian resident will not be taxed in Brazil, on the basis that ADSs are not assets located in Brazil for the purposes of Law No. 10,833. We cannot assure you, however, that the Brazilian tax authorities or
the Brazilian courts will agree with this interpretation. As a result, gains on a disposition of ADSs by a Non-Resident Holder to a Brazilian resident, or even to a non-Brazilian resident, in the event that courts determine that ADSs would
constitute assets located in Brazil, may be subject to income tax in Brazil according to the rules applicable to our common shares, described below.

As a general rule, gains realized as a result of a disposition of our common shares or ADSs are the positive difference between the amount
realized on the transaction and the acquisition cost of our common shares or ADSs.

Under Brazilian law, however, income tax rules on such
gains can vary depending on the domicile of the Non-Resident Holder, the type of registration of the investment by the Non-Resident Holder with the Central Bank and how the disposition is carried out, as described below.

Gains realized on a disposition of shares carried out on a Brazilian stock exchange (which includes the organized over-the-counter market)
are:



| |  |  | exempt from income tax when realized by a Non-Resident Holder that (1) has registered its investment in Brazil with the Central Bank under the rules of Resolution 2,689 (a 2,689 Holder), and (2) is
not a resident in a country or location which is defined as a Tax Haven Jurisdiction for those purposes; or
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | subject to income tax at a rate of 15% in the case of gains realized by (A) a Non-Resident Holder that (1) is not a 2,689 Holder and (2) is not a Tax Haven Jurisdiction resident; or by (B) a
Non-Resident Holder that (1) is a 2,689 Holder, and (2) is a Tax Haven Jurisdiction resident. In this case, a withholding income tax of 0.005% shall be applicable and withheld by the intermediary institution (i.e. a broker) that receives
the order directly from the Non-Resident Holder, which can be later offset against any income tax due on the capital gain earned by the Non-Resident Holder; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | subject to income tax at a rate of up to 25% in any other case, including a case of gains assessed by a Non-Resident Holder that is not a 2,689 Holder, and is a Tax Haven Jurisdiction resident for this purpose (as
described below). In these cases, a withholding income tax of 0.005% of the sale value will be applicable and can be later offset with the eventual income tax due on the capital gain.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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In the case of redemption of securities or capital reduction by a Brazilian corporation, such as
us, the positive difference between the amount effectively received by the Non-Resident Holder and the corresponding acquisition cost is treated, for tax purposes, as capital gain derived from sale or exchange of shares not carried out on a
Brazilian stock exchange market, and is therefore subject to income tax at the rate of 15% or 25%, as the case may be.

The deposit of our
common shares in exchange for ADSs will be subject to Brazilian income tax if the acquisition cost of the shares is lower than (1) the average price per share on a Brazilian stock exchange on which the greatest number of such shares were sold
on the day of deposit, or (2) if no shares were sold on that day, the average price on the Brazilian stock exchange on which the greatest number of shares were sold in the 15 trading sessions immediately preceding such deposit. In such case,
the difference between the acquisition cost and the average price of the shares calculated as above will be considered to be a capital gain subject to income tax withholding at the rate of 15% or 25%, as the case may be. In some circumstances, there
may be arguments to claim that this taxation is not applicable in the case of a Non-Resident Holder that is a 2,689 Holder and is not a resident in a Tax Haven Jurisdiction for this purpose. The availability of these arguments to any specific holder
of our common shares will depend on the circumstances of such holder. Prospective holders of our common shares should consult their own tax advisors as to the tax consequences of the deposit of our common shares in exchange for ADSs.

Any exercise of preemptive rights relating to our common shares or ADSs will not be subject to Brazilian taxation. Any gain on the sale or
assignment of preemptive rights relating to our common shares, including the sale or assignment carried out by the depositary, on behalf of Non-Resident Holders of ADSs, will be subject to Brazilian income taxation according to the same rules
applicable to the sale or disposition of our common shares.

Interpretation of the Discussion on the Definition of Tax Haven Jurisdictions

On June 4, 2010, Brazilian tax authorities enacted Normative Instruction No. 1,037 listing (i) the countries and
jurisdictions considered as Low or Nil Tax Jurisdictions (countries and jurisdictions that do not tax income or tax it at a rate below 20%) or where the local legislation does not allow access to information related to the shareholding composition
of legal entities or to their ownership or to the identity of the effective beneficiary of the income attributed to non-residents, and (ii) the privileged tax regimes, which definition is provided by Law No. 11,727, of June 23, 2008.
Although we believe that the best interpretation of the current tax legislation could lead to the conclusion that the above mentioned privileged tax regime concept should apply solely for purposes of Brazilian transfer pricing and thin
capitalization rules, we cannot assure you whether subsequent legislation or interpretations by the Brazilian tax authorities regarding the definition of a privileged tax regime provided by Law No. 11,727 will also apply to a
Non-Resident Holder on payments potentially made by a Brazilian source.

We recommend prospective investors to consult their own tax
advisors from time to time to verify any possible tax consequences arising of Normative Instruction No. 1,037 and Law No. 11,727. If the Brazilian tax authorities determine that the concept of privileged tax regime provided by
Law No. 11,727 will also apply to a Non-Resident Holder on payments potentially made by a Brazilian source the withholding income tax applicable to such payments could be assessed at a rate up to 25%.

Tax on Foreign Exchange Transactions (IOF/Exchange Tax)

Brazilian law imposes the IOF/Exchange Tax on the conversion of Reais into foreign currency and on the conversion of foreign currency into
Reais. Foreign exchange agreements entered into as from October 7, 2014 in connection with inflows of funds related to investments carried out by Non-Resident Holders in the Brazilian financial and capital markets are subject to the
IOF/Exchange Tax at a zero percent rate. Foreign exchange transactions related to outflows of funds in connection with investments made in the Brazilian financial and capital markets are subject to IOF/Exchange at a zero percent rate. This zero
percent rate applies to payments of dividends and interest on shareholders equity to Non-Resident Holders with respect to investments in the Brazilian financial and capital markets. Other than these transactions, the rate applicable to most
foreign exchange transactions is 0.38%. Other rates may apply to particular transactions and the Brazilian government may increase the rate at any time up to 25.0% on the foreign exchange transaction amount. However, any increase in rates is only
authorized to apply to future transactions.



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Tax on Transactions Involving Bonds and Securities (IOF/Securities Tax)

Brazilian law also imposes the IOF/Securities Tax due on transactions involving bonds and securities, including those carried out on a
Brazilian stock exchange. The rate of the IOF/Securities Tax applicable to transactions involving our common shares is currently zero. However, the rate of the IOF/Securities Tax applicable to the transfer of our common shares with the specific
purpose of enabling the issuance of ADSs is currently zero. This rate is applied on the product of (1) the number of shares which are transferred, multiplied by (2) the closing price for those shares on the date prior to the transfer or,
if such closing price is not available on that date, the last available closing price for those shares. The Brazilian government may increase the rate of the IOF/Securities Tax at any time up to 1.5% per day of the transaction amount, but only
in respect of transactions carried out after the increase in rate enters into force.

Other Brazilian Taxes

There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of our common shares or ADSs
by a Non-Resident Holder except for gift and inheritance taxes levied by some states in Brazil. There are no Brazilian stamp, issue, registration, or similar taxes or duties payable by Non-Resident Holders of our common shares or ADSs.

U.S. Federal Income Tax Considerations

The following summary describes the material U.S. federal income tax consequences of the purchase, ownership, and disposition of our common
shares and ADSs as of the date hereof. Except where noted, this discussion deals only with U.S. Holders (as defined below) that hold our common shares or ADSs as capital assets for U.S. federal income tax purposes (generally, property held for
investment). This summary does not represent a detailed description of the U.S. federal income tax consequences applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:



| |  |  | a dealer in securities or currencies;
| | - |  | -------------------------------------



| |  |  | a financial institution;
| | - |  | ------------------------



| |  |  | a regulated investment company;
| | - |  | -------------------------------



| |  |  | a real estate investment trust;
| | - |  | -------------------------------



| |  |  | an insurance company;
| | - |  | ---------------------



| |  |  | a tax-exempt organization;
| | - |  | --------------------------



| |  |  | a person that received our common shares or ADSs as compensation for the performance of services;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | a person holding our common shares or ADSs as part of a hedging, integrated or conversion transaction or a straddle;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | a person deemed to sell common shares or ADSs under the constructive sale provisions of the Internal Revenue Code of 1986, as amended (the Code);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a trader in securities that has elected the mark-to-market method of accounting for your securities;
| | - |  | ----------------------------------------------------------------------------------------------------



| |  |  | a person liable for alternative minimum tax;
| | - |  | --------------------------------------------



| |  |  | a person who owns or is deemed to own 10% or more of our voting stock;
| | - |  | ----------------------------------------------------------------------



| |  |  | a partnership or other pass-through entity for U.S. federal income tax purposes; or
| | - |  | -----------------------------------------------------------------------------------



| |  |  | a person whose functional currency is not the U.S. dollar.
| | - |  | ------------------------------------------------------------

As used herein,
U.S. Holder means a holder of our common shares or ADSs that is for U.S. federal income tax purposes:



| |  |  | an individual citizen or resident of the United States;
| | - |  | -------------------------------------------------------



| |  |  | a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid
election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The discussion below is based upon the provisions of the Code, and regulations, rulings and
judicial decisions thereunder at the date hereof, and such authorities may be repealed, revoked or modified (possibly on a retroactive basis) so as to result in U.S. federal income tax consequences different from those discussed below. In addition,
this summary is based, in part, upon representations made by the depositary to us and assumes that the deposit agreement, and all other related agreements, will be performed in accordance with their terms.

If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) holds our common shares or ADSs, the tax
treatment of a partner will generally depend on the status of the partner and the activities of the partnership. If you are a partner of a partnership holding our common shares or ADSs, you should consult your tax advisors.

This summary does not contain a detailed description of all the U.S. federal income tax consequences to you in light of your particular
circumstances and does not address the Medicare tax on net investment income or the effects of any state, local or non-U.S. tax laws.

If you are considering the purchase, ownership or disposition of our common shares or ADSs, you should consult your own tax advisors
concerning the U.S. federal income tax consequences to you in light of your particular situation as well as any consequences arising under the laws of any other tax jurisdiction.

ADSs

If you hold ADSs, for U.S. federal
income tax purposes, you generally will be treated as the owner of the underlying common shares that are represented by such ADSs. Accordingly, deposits or withdrawals of our common shares for ADSs will not be subject to U.S. federal income tax.

Taxation of Distributions

Subject
to the discussion under Passive Foreign Investment Company below, distributions on our common shares or ADSs (including amounts withheld to reflect Brazilian withholding taxes and distributions of interest on shareholders
equity, as described above under Brazilian Tax Considerations) will be taxable as dividends to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Such
dividends (including withheld taxes) will be includable in your gross income as ordinary income on the day actually or constructively received by you, in the case of our common shares, or by the depositary, in the case of our ADSs. Such dividends,
however, will not be eligible for the dividends received deduction allowed to corporations.

Under current law, dividends received by
non-corporate U.S. shareholders of qualified foreign corporations will be subject to U.S. federal income tax at lower rates than other types of ordinary income if certain conditions are met. A foreign corporation generally is treated as a qualified
foreign corporation with respect to dividends received from that corporation on shares (or ADSs backed by such shares) that are readily tradable on an established securities market in the United States. U.S. Treasury Department guidance indicates
that our ADSs (which are listed on the NYSE), but not our common shares, are readily tradable on an established securities market in the United States. Thus, we do not believe that dividends that we pay on our common shares that are not represented
by ADSs currently meet the conditions required for these reduced tax rates. There can be no assurance that our ADSs will be considered readily tradable on an established securities market in later years. Non-corporate holders that do not meet a
minimum holding period requirement during which they are not protected from the risk of loss or that elect to treat the dividend income as investment income pursuant to Section 163(d)(4) of the Code will not be eligible for the
reduced rates of taxation regardless of our status as a qualified foreign corporation. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in
substantially similar or related property. This disallowance applies even if the minimum holding period has been met. You should consult your tax advisors regarding the application of this legislation to your particular circumstances.

Notwithstanding the foregoing, non-corporate U.S. Holders will not be eligible for reduced rates of taxation on any dividends received from us
if we are a passive foreign investment company (a PFIC) in the taxable year in which such dividends are paid or in the preceding taxable year (as discussed under Passive Foreign Investment Company below).



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The amount of any dividend paid in Reais will equal the U.S. dollar value of the
Reais received, calculated by reference to the exchange rate in effect at the date the dividend is actually or constructively received by you, in the case of our common shares, or by the depositary, in the case of our ADSs, regardless of
whether the Reais are converted into U.S. dollars at that time. If the Reais received as a dividend are not converted into U.S. dollars at the date of receipt, you will have a tax basis in the Reais equal to their U.S. dollar
value at the date of receipt. Any gain or loss realized on a subsequent conversion or other disposition of the Reais will be treated as U.S. source ordinary income or loss.

Subject to certain conditions and limitations, Brazilian withholding taxes on dividends may be treated as foreign taxes eligible for credit
against your U.S. federal income tax liability. For purposes of calculating the foreign tax credit, dividends paid on our common shares or ADSs will be treated as income from sources outside the United States and will generally constitute passive
category income. Further, in certain circumstances, if you have held our common shares or ADSs for less than a specified minimum period during which you are not protected from risk of loss, or are obligated to make payments related to the dividends,
you will not be allowed a foreign tax credit for foreign taxes imposed on dividends paid on our common shares or ADSs. If you do not elect to claim a U.S. foreign tax credit, you may instead claim a deduction for Brazilian income tax withheld, but
only for a taxable year in which you elect to do so with respect to all foreign income taxes paid or accrued in such taxable year. The rules governing the foreign tax credit are complex. You are urged to consult your tax advisors regarding the
availability of the foreign tax credit under your particular circumstances.

To the extent that the amount of any distribution (including
amounts withheld to reflect Brazilian withholding taxes and distributions of interest on shareholders equity, as described above under Brazilian Tax Considerations) exceeds our current and accumulated earnings and profits for
a taxable year, as determined under U.S. federal income tax principles, the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of our common shares or ADSs, and the balance in excess of
adjusted basis will be taxed as capital gain recognized on a sale or exchange (as discussed below under Taxation of Capital Gains). However, we do not expect to keep earnings and profits in accordance with U.S. federal income tax
principles. Therefore, you should expect that a distribution will generally be treated as a dividend (as discussed above).

Distributions
of common shares or ADSs that are received as part of a pro rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax.

Passive Foreign Investment Company

In
general, we will be a PFIC for any taxable year in which:



| |  |  | at least 75% of our gross income is passive income, or
| | - |  | ------------------------------------------------------



| |  |  | at least 50% of the value (determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the production of passive income.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For purposes of determining whether we are a PFIC, cash is a passive asset and passive income generally includes dividends, interest,
royalties and rents (other than royalties and rents derived in the active conduct of a trade or business and not derived from a related person). In addition, income from commodities transactions is generally considered passive unless such income is
derived in the active conduct of a commodities business. If we own at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of the other corporations
assets and receiving our proportionate share of the other corporations income.

Based on the composition of our income and assets,
including goodwill, we may be classified as a PFIC for U.S. federal income tax purposes. The determination of whether we are a PFIC is made annually. Accordingly, it is possible that our status as a PFIC may change in any future taxable year due to
changes in our asset or income composition. Although the determination of whether we are a PFIC is made annually, if we are a PFIC for any taxable year in which you hold our common shares or ADSs, you will be subject to special tax rules discussed
below for that year and for each subsequent year in which you hold the common shares or ADSs (even if we do not qualify as a PFIC in such subsequent years). However, if we cease to be a PFIC, you can avoid the continuing impact of the PFIC rules by
making a special election (a Purging Election) to recognize gain in the manner described below as if your common shares or ADSs had been sold on the last day of the last taxable year during which we were a PFIC. In addition, a new
holding period would be deemed to begin for your common shares or ADSs for purposes of the PFIC rules. After the Purging Election, your common shares or ADSs with respect to which the Purging Election was made will not be treated as shares in a PFIC
unless we subsequently become a PFIC. You are urged to consult your own tax advisor about the availability of this election, and whether making the election would be advisable in your particular circumstances.



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If we are a PFIC for any taxable year during which you hold our common shares or ADSs, you will
be subject to special tax rules with respect to any excess distribution received and any gain realized from a sale or other disposition, including a pledge, of common shares or ADSs. Distributions received in a taxable year that are
greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or your holding period for the common shares or ADSs will be treated as excess distributions. Under these special tax rules:



| |  |  | the excess distribution or gain will be allocated ratably over your holding period for the common shares or ADSs,
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax
attributable to each such year.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

You will also generally be required to file Internal Revenue Service (IRS) Form
8621 if you hold our common shares or ADSs in any year in which we are classified as a PFIC.

If we are a PFIC for any taxable year during
which you hold our common shares or ADSs and any of our non-U.S. subsidiaries is also a PFIC, you will be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. You
are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.

In certain circumstances, in
lieu of being subject to the excess distribution rules discussed above, you may make an election to include gain on the stock of a PFIC as ordinary income under a mark-to-market method, provided that such stock is regularly traded on a qualified
exchange. Under current law, the mark-to-market election may be available to holders of ADSs because the ADSs are listed on the NYSE, which constitutes a qualified exchange, although there can be no assurance that the ADSs will be regularly
traded for purposes of the mark-to-market election. It should also be noted that only our ADSs and not our common shares are listed on a qualified stock exchange in the United States. Our common shares are listed on the BM&FBOVESPA, which
must meet certain trading, listing, financial disclosure and other requirements to be treated as a qualified exchange under applicable U.S. Treasury regulations for purposes of the mark-to-market election, and no assurance can be given that our
common shares will be regularly traded for purposes of the mark-to-market election.

If you make an effective mark-to-market
election, you will include in each year that we are a PFIC as ordinary income the excess of the fair market value of your common shares or ADSs at the end of the year over your adjusted tax basis in the common shares or ADSs. You will be entitled to
deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the common shares or ADSs over their fair market value at the end of the year, but only to the extent of the net amount previously included in income as a result
of the mark-to-market election. If you make an effective mark-to-market election, in each year that we are a PFIC any gain you recognize upon the sale or other disposition of your common shares or ADSs will be treated as ordinary income and any loss
will be treated as ordinary loss, but only to the extent of the net amount of previously included income as a result of the mark-to-market election.

Your adjusted tax basis in the common shares or ADSs will be increased by the amount of any income inclusion and decreased by the amount of
any deductions under the mark-to-market rules. If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent taxable years unless the common shares or ADSs are no longer regularly
traded on a qualified exchange or the IRS consents to the revocation of the election. You are urged to consult your tax advisor about the availability of the mark-to-market election, and whether making the election would be advisable in your
particular circumstances.

Alternatively, you can sometimes avoid the rules described above by electing to treat us as a qualified
electing fund under Section 1295 of the Code. However, this option is not available to you because we do not intend to comply with the requirements necessary to permit you to make this election.

You are urged to consult your tax advisors concerning the United States federal income tax consequences of holding common shares or ADSs if we
are considered a PFIC in any taxable year.



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Taxation of Capital Gains

Subject to the discussion under Passive Foreign Investment Company above, you generally will recognize taxable gain or loss
upon the sale, exchange or other taxable disposition of our common shares or ADSs equal to the difference between the amount realized on the sale, exchange or other taxable disposition of such common shares or ADSs and your adjusted tax basis in
such common shares or ADSs. If we are a PFIC for any taxable year in which you hold our common shares or ADSs (as we believe is likely to be the case for the current year), and you do not make a Purging Election or a mark-to-market election, any
gain recognized will be treated as ordinary income and subject to the special tax rules described above under Passive Foreign Investment Company. If you do not hold our common shares or ADSs in any taxable year in which we qualify
as a PFIC, such gain will generally be capital gain. Any loss recognized on a sale, exchange or other taxable disposition of our common shares or ADSs will generally be capital loss. Capital gains or losses will be long-term capital gain or loss if
our common shares or ADSs have been held for more than one year. Certain non-corporate U.S. Holders (including individuals) may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of
capital losses is subject to limitations under the Code.

If a Brazilian income tax is withheld on the sale or other disposition of our
common shares or ADSs, your amount realized will include the gross amount of the proceeds of that sale or other disposition before deduction of the Brazilian income tax. Capital gain or loss, if any, realized by you on the sale, exchange or other
taxable disposition of our common shares or ADSs generally will be treated as U.S. source gain or loss for U.S. foreign tax credit purposes. Consequently, in the case of gain from the disposition of common shares or ADSs that is subject to Brazilian
income tax, you may not be able to benefit from the foreign tax credit for that Brazilian income tax (i.e., because the gain from the disposition would be U.S. source), unless you can apply the credit (subject to applicable limitations) against U.S.
federal income tax payable on other income from foreign sources. Alternatively, you may take a deduction for the Brazilian income tax if you do not take a credit for any foreign taxes paid or accrued during the taxable year.

Other Brazilian Taxes

You should note
that any Brazilian IOF/Exchange Tax or IOF/Securities Tax (as discussed above under Brazilian Tax Considerations) generally will not be treated as a creditable foreign tax for U.S. federal income tax purposes, although you may be
entitled to deduct such taxes, subject to applicable limitations under the Code. You should consult your tax advisors regarding the U.S. federal income tax consequences of these taxes.

Information Reporting and Backup Withholding

In general, information reporting will apply to dividends (including distributions of interest on shareholders equity) in respect of our
common shares or ADSs and the proceeds from the sale, exchange or redemption of our common shares or ADSs that are paid to you within the United States (and in certain cases, outside the United States), unless you establish that you are an exempt
recipient, such as a corporation. A backup withholding tax may apply to such payments if you fail to provide your correct taxpayer identification number or certification of other exempt status or fail to report in full dividend and interest income.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a
credit against your U.S. federal income tax liability provided the required information is timely furnished to the IRS.

The above
description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership or disposition of our common shares or ADSs. Each holder should consult such holders own tax advisor concerning the
overall tax consequences to it, including the consequences under laws other than U.S. federal income tax laws, of an investment in our common shares or ADSs.

F. Dividends and Paying Agents

Not
applicable.

G. Statement by Experts

Not applicable.



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H. Documents on Display

We are subject to the informational reporting requirements of the Exchange Act, which requires that we file periodic reports and other
information with the SEC. As a foreign private issuer, we file annual reports on Form 20-F as opposed to Form 10-K. We do not file quarterly reports on Form 10-Q but furnish reports on Form 6-K.

Our reports and other information filed by us with the SEC may be inspected and copied by the public at the public reference facilities
maintained by the SEC at Station Place, 100 F Street, N.E., Room 1580, Washington, D.C. 20549 and are also available on the website of the SEC at http://www.sec.gov.

We furnish The Bank of New York, as the depositary of our ADSs, with annual reports in English, which include a review of operations and our
audited consolidated financial statements prepared in compliance with IFRS, and our Annual Report on Form 20-F. Upon our request, the depositary will promptly mail such reports to all record holders of ADSs. We also furnish to the depositary, in
English, all notices of shareholders meetings and other reports and communications that are made generally available to our shareholders. Upon our request, the depositary will make such notices, reports and communications available to holders
of ADSs and will mail to all record holders of ADSs a notice containing a summary of the information contained in any notice of a shareholders meeting it receives.

As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements.
As a foreign private issuer, we are also exempt from the rules under the Exchange Act relating to short-swing profit disclosure and liability.

I.
Subsidiary Information

Not applicable.

ITEM 11QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks arising in the normal course of our business. Market risks are beyond our control and consist of the possibility
that changes in interest rates, exchange rates, the market prices of our products and credit risks may adversely affect the value of our financial assets and liabilities or our future cash flows or earnings.

Raw Material Acquisition Risks

For the acquisition of farming inputs, our primary risks are foreign-exchange variations, the supply and demand of each input, farming
commodity prices and freight prices. Our dependence on imported raw materials is also subject to supply and customs clearance delays. We are also subject to risks regarding the availability of the specific varieties of seeds we use, which are
affected by weather conditions, among other factors.

In addition, the price of diesel fuel, which is the primary fuel used in farming
machinery and trucks, is affected by the variation in oil prices as well as by the price-control policies adopted by the Brazilian government.

Foreign Exchange Risks

Certain of our income is linked to the exchange rate between the real and the U.S. dollar, and consequently our revenue are
impacted by foreign exchange fluctuations. Certain of our commodities, such as soybean and cotton, may be priced in reais or in U.S. dollars. In addition, certain of the inputs necessary for farming production, such as chemicals,
pesticides and fertilizers, may be priced in or based on the U.S. dollar. In order to reduce the impact on revenue, we seek to limit our foreign exchange exposure to 5% of our total expected revenue from commodities typically priced in U.S.
dollars.

On June 30, 2014, we had a long position in U.S. dollars in the amount of US$9.30 million. The result of a
hypothetical devaluation of 10% of the real in relation to the dollar would generate a profit before taxes of R$5.6 million.



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Interest Rate Risks

Exposure to interest rates subjects us and our subsidiaries to risks arising from the effect of interest rate fluctuations on our financial
assets and liabilities. A portion of our indebtedness is subject to fixed rates of interest, while only our financings with BNDES are subject to variable rates indexed to the TJLP rate. We do not engage in hedging transactions with respect to such
financings because we believe the interest rates charged thereon are lower than typical rates in the Brazilian market.

If our volume of
funds invested in financial instruments indexed to the CDI rate remains the same with June 30, 2014 as a base date, a hypothetical decrease in the CDI rate of 10% would reduce our income by R$77.7 thousand monthly.

Farming Commodity Risks

A reduction in commodity prices would affect our margins and operating results. Commodity price variations are associated with global supply
and demand, as well as climatic, technological, commercial and economic conditions and government policies. To reduce these risks to us from commodity price variations, we use financial instruments such as derivatives and over-the-counter
instruments including options and futures contracts negotiated in the commodities market throughout the ordinary course of our crop cycles, from the purchase of inputs to crop planting up until harvest. We believe that the maintenance of our current
hedging policy is necessary to minimize the risks related to commodity price variations.

At June 30, 2014, we had a short position
in soybean derivatives (CBOT-futures, options and OTC contracts) in the total volume of 181 thousand bags.

Considering sales volumes
hedged by derivatives and the soybean price as of June 30, 2014, we believe that a hypothetical decrease of 10% in the price of soybean not hedged by derivatives would decrease our expected revenues from grain sales for the next 12 months by
R$10.9 million.

Risk Management and Hedging Policies

We are exposed to risks derived from commodity price variations for such products as soybean, corn, sugarcane, cotton, eucalyptus, rice
and sorghum, as well as foreign-exchange variations. We hedge our exposure to commodity price risks for our transactions through over-the-counter instruments and maintain our exposures within pre-established limits. Such financial instruments
include (i) commodity price and exchange rate swap contracts; (ii) currency contracts that provide a fixed exchange rate in Reais for our dollar-denominated receivables and chargeables; (iii) commodity futures contracts for
soybean, corn, ethanol and cottonseed that allow us to buy or sell commodities at predetermined prices; and (v) options contracts that allow us to acquire the right to buy or sell an asset at a preset price by a certain date. Since these
transactions are normally made in U.S. dollars, we hedge our exposure to foreign-exchange risks by entering into contracts with fixed exchange rates. We have set our limit of foreign-exchange exposure to 5% of the total revenue expected from the
sale of each commodity produced by us.

Our risk management policy seeks to protect our cash flows and expenditures, and thus we
monitor the volatility and historical patterns of the primary market trends that affect our revenue and production costs, including (i) commodity prices, commonly determined in U.S. dollars; (ii) differences between domestic and
international market prices of our commodities; (iii) exchange rates; and (iv) prices impacting our principal production costs, including, fertilizers, pesticides and chemicals.

In addition to monitoring these trends, our strategic planning department analyzes them in light of our exposures and positions in the market
and prepares reports on a regular basis analyzing such risks in the light of simulations under various hypothetical situations indicating the effects on our results of different variations in market prices and conditions. Such analysis and reports
include the monitoring and assessment of: (i) the status of the commercialization and delivery of our products; (ii) updates regarding our estimated planted area and production volumes; (iii) the distribution of sales by product and
type (such as futures contracts, options, fixed term contracts); (iv) market analysis and historical comparisons of the prices, rates and other indices that affect our gross revenue; (v) risk analysis models and simulations such as the
Monte Carlo simulation, that analyze the volatility and sensitivity of our assets and the correlations that exist among such assets; and (vi) stress test analyses under different scenarios. Such reports are then delivered to our risk management
committee, which develops the goals and limits of our hedging strategy and our hedging policy, which is defined and approved by our board of directors. Our risk management committee then supervises our strategic planning department in the
implementation and the execution of our hedging strategy.



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ITEM 12  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not applicable.

B. Warrants and Rights

Not applicable.

C. Other Securities

Not applicable.

D. American Depositary Shares

The
following table sets for the fees and expenses that a holder of ADRs may have to pay pursuant to our Amended and Restated Deposit Agreement, dated as of November 6, 2012 (the Deposit Agreement), with The Bank of New York Mellon, as
depositary, in connection with our ADS program:



|                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Fee and Reimbursement Provisions                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                             
|Fee or Charge                                                                                                                                                                                                                                                                                |  | Relating to                                                                                                                                                                                                                                 
|1. Taxes and other governmental
charges                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                             
|2. Registration fees as may be in effect for the registration of transfers of common shares underlying the ADRs on the share register
of our company or any Brazilian registrar                                                                                                              |  | The transfer of common shares underlying ADRs to or from the name of the depositary or its nominee or Banco Itaú, S.A., as
custodian for the depositary, or its nominee on the making of deposits or withdrawals under the Deposit Agreement
|3. Cable, telex and facsimile transmission expenses expressly provided under the Deposit
Agreement                                                                                                                                                                                           |  |                                                                                                                                                                                                                                             
|4. Expenses incurred by the depositary in the conversion of foreign currency                                                                                                                                                                                                                 |  | Amounts in Reais received by way of dividends or other distributions or the net proceeds from the sale of securities, property or other
rights in respect of ADRs                                                                           
|5. U.S. $5.00 or less per 100 ADRs (or portion thereof)                                                                                                                                                                                                                                      |  | The delivery of ADRs and the surrender of ADRs, or the distribution of securities or other property to holders of ADRs                                                                                                                      
|6. U.S. $0.02 or less per ADR (or portion thereof)                                                                                                                                                                                                                                           |  | Any cash distribution made pursuant to the Deposit Agreement, except for distributions of cash dividends                                                                                                                                    
|7. U.S. $0.02 or less per ADR (or portion thereof) per year, subject to prior consent by the
Company                                                                                                                                                                                         |  | Depositary services                                                                                                                                                                                                                         
|8. Payment of any other charges payable by the depositary, any of the depositarys agents, including the depositarys
custodian, or the agents of the depositarys agents in connection with the servicing of shares underlying the American Depositary Shares or other deposited securities |  |                                                                                                                                                                                                                                             

The fee and reimbursement provisions described in rows seven and eight of the table above may, at the
depositarys discretion, be billed to the holders of ADSs or deducted from one or more cash dividends or other cash distributions. For the year ended June 30, 2014, the annual fee for depositary services was charged to holders of ADSs.

For the year ended June 30, 2014, pursuant to a letter agreement between our company and the depositary, no amount was reimbursed by
the depositary to us in connection with investor relations expenses and listing fees.



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A form of the Deposit Agreement is filed as Exhibit 2.01 to this Annual Report on Form 20-F. We
encourage you to review this document carefully if you are a holder of ADSs.

Payment of Taxes

You will be responsible for any taxes or other governmental charges payable on your ADSs or on the deposited securities represented by any of
your ADSs. The depositary may refuse to register any transfer of your ADSs or allow you to withdraw the deposited securities represented by your ADSs until such taxes or other charges are paid. It may apply payments owed to you or sell deposited
securities represented by your American Depositary Shares to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and
pay to ADS holders any proceeds, or send to ADS holders any property, remaining after it has paid the taxes.

PART II

ITEM 13DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15CONTROLS AND PROCEDURES

A. Disclosure Controls and Procedures

As
of the end of the period covered by this Annual Report on Form 20-F, management, with the participation of the Companys Chief Executive Officer and Chief Administrative Officer, performed an evaluation of the effectiveness of our disclosure
controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and Chief
Administrative Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective. Based on this
evaluation, our Chief Executive Officer and Chief Administrative Officer, concluded that, as of June 30, 2014, the design and operation of our disclosure controls and procedures were effective at the reasonable assurance level.

B. Managements Annual Report on Internal Control Over Financial Reporting

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting.

The Companys internal control over financial
reporting is a process designed by, or under the supervision of, the Companys principal executive and financial officers and effected by the Companys board of directors, management, and other personnel to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS, as issued by IASB.

The Companys internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the Companys assets that could have a material effect on the consolidated financial statements.



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Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements on a timely basis. Therefore even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management performed an assessment of the effectiveness of our internal control over financial reporting at June 30, 2014, utilizing
the criteria described in the Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal
control over financial reporting was effective at June 30, 2014. Based on this assessment, management has concluded that, as of June 30, 2014, the Companys internal control over financial reporting was effective at the reasonable
assurance level.

C. Attestation Report of the Registered Public Accounting Firm

Pursuant to applicable SEC rules, this annual report does not include an attestation report of the Companys registered public accounting
firm. We will only be required to include this report once we become an accelerated filer or a large accelerated filer.

D. Changes in Internal Control
Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) that occurred during the year ended June 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16AAUDIT COMMITTEE FINANCIAL EXPERT

For the purposes of the Sarbanes-Oxley Act of 2002, our board of directors established a fiscal council (Fiscal Council), which
convenes at least quarterly, and as often as it determines is appropriate to carry out its responsibilities. This committee has responsibility for planning and reviewing our annual and quarterly reports and accounts with the involvement of our
auditors during such process, focusing particularly on compliance with legal requirements and accounting standards. The ultimate responsibility for reviewing and approving our annual and quarterly reports and accounts remains with our board of
directors.

Our board of directors has determined that Débora de Souza Morsch, a member of the Companys Fiscal
Council, is a financial expert, as such term is defined in the SEC rules. Mrs. Morsch is independent, as such term is defined in the Novo Mercado listing rules. Our board of directors has determined that Mrs. Morsch is
independent under the standards of the NYSE listing rules and Rule 10A-3 under the Exchange Act that would apply if the Company were not relying on the exemption provided in paragraph (c)(3) of Rule 10A-3, as described in Item
16DExemptions from the Listing Standards for Audit Committees. See Item 6Directors, Senior Management and EmployeesBoard Practices for information regarding the experience of Mrs. Morsch.

ITEM 16BCODE OF ETHICS

Under NYSE Rule 303A.10, each U.S. company listed on the NYSE must adopt and disclose a code of business conduct and ethics for directors,
officers and employees and promptly disclose any waivers of the code for directors or executive officers. We are subject to a similar recommendation under Brazilian law, and we have adopted a code of ethics that applies to our officers and
employees.

Our code of ethics, as well as further information concerning our corporate governance practices and applicable Brazilian law,
is available on our website www.brasil-agro.com. Information on our website is not incorporated by reference in this form. Copies of our Code of Business Conduct and Ethics are also available without charge upon request to our Investor Relations
Office.

If we make any substantive amendment to the code of ethics or grant any waivers, including any implicit waiver, from a provision
of the code of ethics, we will disclose the nature of such amendment or waiver on our website. During the year ended June 30, 2014, no such amendment was made or waiver granted.



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ITEM 16CPRINCIPAL ACCOUNTANT FEES AND SERVICES

The relationship with our independent auditors in respect to the contracting of services unrelated to the external audit is based on principles
that preserve the independence of the auditor. Our board of directors approves our financial statements, the performance by our auditors of audit and permissible non-audit services, and associated fees, supported by our Fiscal Council. The
Boards approval also takes into account restrictions on certain services under the Sarbanes-Oxley Act.

The following table
describes the total amount of fees billed to us by our independent auditors for services performed in the fiscal years ended June 30, 2014 and 2013.



|                      |  |                        |          |  |      |  |          | 
|--------------------- |  | ---------------------- | -------- |  | ---- |  | -------- | 
|                      |  | Year Ended June 30,    |         
|                      |  | 2014                   |          |  | 2013 | 
|                      |  | (in thousand of Reais) |         
|Audit fees(1)         |  |                        | 1,099.7  |  |      |  | 1,004.20 | 
|Audit-related fees(2) |  |                        | 189.38   |  |      |  | 22.44    | 
|Tax fees              |  |                        |         |  |      |  |         | 
|All other fees(3)     |  |                        | 47.62    |  |      |  | 936.34   | 
|                      |  |                        |          |  |      |  |          | 
|Total fees            |  |                        | 1,336.69 |  |      |  | 1,962.98 | 
|                      |  |                        |          |  |      |  |          | 



|(1) | Audit fees in fiscal years 2014 and 2013 are the aggregated fees billed by Ernst & Young Auditores Independentes S.S. for the audit of our consolidated and annual financial statements including reviews of interim
financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-related fees in fiscal years 2014 and 2013 were the fees billed by Ernst & Young Auditores Independentes S.S. for the interoffice reports issued regarding the audit of the consolidated reporting package and
internal controls of Brasilagro for Cresud consolidation purposes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | All other fees billed by Ernst & Young Auditores Independentes S.S. in 2014 and 2013 amounting, respectively, to R$48 thousand and R$34 thousand (1) in regards of the agreed upon procedures for the filling process
of Brasilagros financial statements in the Argentinean stock market (2) Foreign exchange conversion review work related to the Brasilagros consolidation process within Cresud consolidated financial statements. All other fees invoiced by
PricewaterhouseCoopers Auditores Independentes in 2012 for a total amount of R$902 thousand were in connection with the offering of our securities (ADRs) and the related review work for the Brasilagro registration with the SEC.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Audit Committee Pre-Approval Policies and Procedures

Our board of directors has established pre-approval policies and procedures for the engagement of registered public accounting firm for audit
and non-audit services. Under such pre-approval policies and procedures, our board of directors reviews the scope of the services to be provided by each registered public accounting firm to be engaged in order to ensure that there are no
independence issues and the services are not prohibited services as defined by Sarbanes-Oxley Act of 2002.

ITEM 16DEXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

In establishing a permanent Fiscal Council, the Company has availed itself of paragraph (c)(3) of Rule 10A-3 of the Exchange Act, which
provides a general exemption from the audit committee requirements for a foreign private issuer (such as the Company) with a Fiscal Council, subject to certain requirements, which continue to be applicable under Rule 10A-3.

NYSE rules require that listed companies have an audit committee that (i) is composed of a minimum of three independent directors who are
all financially literate, (ii) meets the SEC rules regarding audit committees for listed companies, (iii) has at least one member who has accounting or financial management expertise and (iv) is governed by a written charter
addressing the committees required purpose and detailing its required responsibilities. However, as a foreign private issuer, the Company may rely on an exemption from the requirement to have an audit committee. The Brazilian corporate law
requires companies to have a non-permanent Fiscal Council composed of three to five members who are elected at the general shareholders meeting. The Fiscal Council operates independently from management and from a companys external
auditors. Its main function is to monitor the activities of management, examine the financial statements of each fiscal year and provide a formal report to our shareholders.

The Company has a permanent Fiscal Council that consists of three members and three alternates and which has ordinary meetings every month.
The members of the Companys Fiscal Council are all financially literate, and one member has accounting expertise that qualifies him as a financial expert. The Company believes that its Fiscal Council meets the requirements for the exemption
available to foreign private issuers under the SEC rules regarding audit committees of listed companies. In addition, the Fiscal Council operates under a written charter, which the Company believes meets the NYSEs requirements for audit
committee charters. The Fiscal Council is not the equivalent of, or wholly comparable to, a U.S. audit committee. Among other differences, it is not required to meet the standards of independence established in Rule 10A-3 and is not
fully empowered to act on matters that are



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required by Rule 10A-3 to be within the scope of an audit committees authority. Nonetheless, with the attributions that have been provided to the Fiscal Council to the extent permitted by
Brazilian law, the Company believes that its current corporate governance system, taken as a whole, including the ability of the Fiscal Council to consult internal and external experts, is similar to a system having an audit committee functioning as
a committee of its Board of Directors, the main difference being that the Fiscal Council does not have authority to appoint our independent auditors. This authority lies with the Companys shareholders. Accordingly, the Company does not believe
that its reliance on the exemption in paragraph (c)(3) of Rule 10A-3 materially adversely affects the ability of the Fiscal Council to act independently and to satisfy the other requirements of Rule 10A-3 to the extent permitted by the Brazilian
corporate law. For a further discussion of our Fiscal Council, see Item 6Directors, Senior Management and EmployeesBoard PracticesFiscal Council.

ITEM 16EPURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

There were no purchases of equity securities by us or on our behalf during the year ended June 30, 2014.

On September 2, 2013, we approved the repurchase program of common shares up to the limit of 3,511,130 common shares, not exceeding the
balance of profits reserve available, included in our balance sheet at June 30, 2013. During the year ended June 30, 2014, we acquired 195,800 common shares, which account for 0.34% of outstanding shares (excluding the shares held by the
controlling shareholders).

ITEM 16FCHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT

None.

ITEM 16GCORPORATE GOVERNANCE

We adopt best corporate governance practices based on a continual process of organizational improvement, translating into greater transparency,
liquidity and confidence for our investors. We comply with listing regulations, among them, diffused control, protection mechanisms and equality of rights.

Company data is given full disclosure on our investor relations website, where information on our vision of sustainability and actions with
respect to the theme can be found. The Company has adhered to Level A of the Global Reporting Initiative guidelines for the publication of its Annual Reports under Brazilian law.

Further information concerning our corporate governance practices and applicable Brazilian law is available on the Companys website
(www.brasil-agro.com). Information on our website is not incorporated by reference in this Annual Report on Form 20-F.

Under
Section 303A.11 of the NYSE Listed Company Manual and Item 16G of the Form 20-F, we are required to disclose any significant differences in our corporate governance practices from those required to be followed by U.S. companies under the
NYSE listing standards. We have summarized these significant differences below.

We are permitted to follow practices in Brazil in lieu of
the provisions of the NYSE Corporate Governance Rules, except that we are required to have a qualifying audit committee under Section 303A.06 of the Rules or avail ourselves of an appropriate exemption. As a foreign private issuer, we have
modified our fiscal council in order to avail ourselves of an exemption from the listing standards for audit committees. See Item 6Directors, Senior Management and EmployeesBoard PracticesFiscal Council. In addition,
our chief executive officer is obligated, under Section 303A.12(b), to promptly notify the NYSE in writing after any of our executive officers becomes aware of any material non-compliance with any applicable provisions of the NYSE Corporate
Governance Rules. We are also required under Section 303A.12(c) of the NYSE Corporate Governance Rules to submit an annual written affirmation of compliance with applicable provisions of the rules and, under certain circumstances, an interim
written affirmation of compliance.

Majority of Independent Directors

Under NYSE Rule 303A.01, each U.S. company listed on the NYSE must have a majority of directors that meet the independence requirements
of the NYSE. Under the Novo Mercado rules, at least 20.0% of our directors must be independent for purposes of those rules, and a majority of our directors currently meet that standard.



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Separate Meetings of Non-Management Directors

Under NYSE Rule 303A.03, the non-management directors of each U.S. company listed on the NYSE must meet at regularly scheduled executive
sessions without management. We do not have a similar requirement under Brazilian practice, but in any event, all members of our board are non-executive directors. Our independent directors do not meet separately from directors who are not
independent.

Nominating/Corporate Governance Committee

Under NYSE Rule 303A.04, each U.S. company listed on the NYSE must have a nominating/corporate governance committee composed entirely of
directors that meet the independence requirements of the NYSE. We are not required to have such a committee under Brazilian law, and accordingly, do not have one.

Compensation Committee

Under NYSE Rule
303A.05, each U.S. company listed on the NYSE must have a compensation committee composed entirely of directors that meet the independence requirements of the NYSE. We are not required to have such a committee under Brazilian law. However, in
accordance with the best practices of corporate governance, the Company established a Compensation Committee on March 1st, 2012. See Item 6Directors, Senior Management and Employees.

The NYSE recently adopted revised listing standards relating to compensation committees for listed companies which, (1) continue to
require that the compensation committee be composed solely of independent directors but contain more specific guidance regarding the independence standards for those directors, (2) require listed companies to grant the compensation committee,
in its sole discretion, the authority to retain or obtain a compensation adviser, to be directly responsible for the compensation and oversight of any compensation adviser so retained with appropriate funding from the listed company and
(3) require the compensation committee to assess the independence of any compensation adviser, other than the listed companys in-house legal counsel. The NYSEs revised listing standards permit foreign private issuers to follow home
country practice and disclose the differences between their home country practices and those required of U.S. listed companies. We avail ourselves of this exemption and continue our current compensation practices in accordance with the Brazilian
corporate law and Brazilian practice.

Audit Committee

Under NYSE Rule 303A.06 and the requirements of Rule 10A-3 of the SEC, each U.S. company listed on the NYSE is required to have an audit
committee consisting of members that comply with the requirements of Rule 10A-3 and that meet the independent requirements of the NYSE. In addition, the audit committee must have a written charter compliant with the requirements of NYSE Rule
303.A.06(c), the listed company must have an internal audit function and the listed company must fulfill all other requirements of the NYSE and Rule 10A-3. The SEC has recognized that, for foreign private issuers, local legislation may delegate some
of the functions of the audit committee to other bodies. We have availed ourselves of an exemption from certain of the standards for audit committees. See Item 16DExemptions from the Listing Standards for Audit Committees, which
explains how our Fiscal Council differs from an audit committee for a U.S. listed company and is incorporated herein by reference.

Equity Compensation
Plans

Under NYSE Rule 303A.08, shareholders must be given the opportunity to vote on all equity compensation plans and material
revisions thereto, with certain limited exemptions as described in the Rule. Our board of directors recently proposed to shareholders the establishment of a stock option plan to stimulate our growth and to retain the services of executives and
certain employees by enabling them to become shareholders in our Company. Under our bylaws and the Brazilian corporate law, stock option plans for our management and employees must be approved by our shareholders. On October 29, 2008, our
shareholders approved a stock option plan for our executive officers. For more details, see Item 6Directors, Senior Management and EmployeesStock Option Plan.

Corporate Governance Guidelines

Under NYSE Rule 303A.09, each U.S. listed company must adopt and disclose their corporate governance guidelines. We do not have a
similar requirement under Brazilian law. However, we have listed our common shares on the Novo Mercado of the São Paulo Stock Exchange, which requires adherence to the corporate governance standards described under Item 9. The
Offer and Listing-C. Markets-São Paulo Stock Exchange Corporate Governance Standards.



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Further information concerning our corporate governance practices and applicable Brazilian law is
available on our website. Information on our website is not incorporated by reference in this form.

ITEM 16HMINE
SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17FINANCIAL STATEMENTS

See Item 18Financial Statements.

ITEM 18FINANCIAL STATEMENTS

See our Consolidated Financial Statements beginning at page F-1.

ITEM 19EXHIBITS



|              |  |                                                                                                                                                                                                                                                                                                                                          
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                              
|              | 
|1.01          |  | Bylaws of Brasilagro  Companhia Brasileira de Propriedades Agrícolas (English translation) (incorporated by reference to Current Report on Form 6-K, submitted December 13, 2012, SEC File No. 001-35723)                                                                                                                               
|              | 
|2.01          |  | Form of Amended and Restated Deposit Agreement Among Brasilagro  Companhia Brasileira de Propriedades Agrícolas, the Bank of New York Mellon and Owners and Holders of American Depositary Shares (incorporated by
reference to Exhibit 2.01 to the Registration Statement on Form 20-F, filed October 31, 2012, SEC File No. 001-35723)
|              | 
|4.01          |  | Stock Option Plan of Brasilagro  Companhia Brasileira de Propriedades Agrícolas, approved by the Annual Extraordinary Shareholders Meeting of October 29, 2008 (English translation) (incorporated by reference to
Exhibit 4.01 to the Registration Statement on Form 20-F, filed October 31, 2012, SEC File No. 001-35723)            
|              | 
|4.02          |  | Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Araucária (incorporated by reference to Exhibit 4.02 to the Registration Statement on Form 20-F, filed October 31,
2012, SEC File No. 001-35723)                                                                                
|              | 
|4.03          |  | First Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Araucária (incorporated by reference to Exhibit 4.03 to the Registration Statement on Form 20-F,
filed October 31, 2012, SEC File No. 001-35723)                                                             
|              | 
|4.04          |  | Second Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Araucária (incorporated by reference to Exhibit 4.04 to the Registration Statement on Form 20-F,
filed October 31, 2012, SEC File No. 001-35723)                                                            
|              | 
|4.05          |  | Third Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Araucária (incorporated by reference to Exhibit 4.05 to the Registration Statement on Form 20-F,
filed October 31, 2012, SEC File No. 001-35723)                                                             
|              | 
|4.06          |  | Fourth Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Araucária (incorporated by reference to Exhibit 4.06 to the Annual Report on Form 20-F, filed
October 31, 2013, SEC File No. 001-35723)                                                                     
|              | 
|4.07          |  | Fifth Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Araucária (incorporated by reference to Exhibit 4.07 to the Annual Report on Form 20-F, filed
October 31, 2013, SEC File No. 001-35723)                                                                      
|              | 
|4.08          |  | Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Alto Taquari (incorporated by reference to Exhibit 4.06 to the Registration Statement on Form 20-F, filed October 31, 2012,
SEC File No. 001-35723)                                                                             



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|              |  |                                                                                                                                                                                                                                                                        
|------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                                                                                                            
|              | 
|4.09          |  | First Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Alto Taquari (incorporated by reference to Exhibit 4.07 to the Registration Statement on Form 20-F, filed
October 31, 2012, SEC File No. 001-35723)     
|              | 
|4.10          |  | Second Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Alto Taquari (incorporated by reference to Exhibit 4.08 to the Registration Statement on Form 20-F, filed October 31,
2012, SEC File No. 001-35723)    
|              | 
|4.11          |  | Third Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Alto Taquari (incorporated by reference to Exhibit 4.09 to the Registration Statement on Form 20-F, filed October 31,
2012, SEC File No. 001-35723)     
|              | 
|4.12          |  | Fourth Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Alto Taquari (incorporated by reference to Exhibit 4.12 to the Annual Report on Form 20-F, filed October
31, 2013, SEC File No. 001-35723)
|              | 
|4.13          |  | Fifth Amendment to Agreement to Supply Sugarcane, entered into by Brasilagro and ETH Bioenergia, in connection with Fazenda Alto Taquari (incorporated by reference to Exhibit 4.13 to the Annual Report on Form 20-F, filed October
31, 2013, SEC File No. 001-35723) 
|              | 
|4.14          |  | Stock Purchase Agreement made as of December 12th, 2013, by and between Agrotech S.A. and Brasilagro Companhia Brasileira de Propriedades Agrícolas                                                                                                                    
|              | 
|4.15          |  | Assignment of Loan Agreements made as of the 12th day of December 2013 by Helmir S.A. to Brasilagro Companhia Brasileira de Propriedades Agrícolas                                                                                                                     
|              | 
|4.16          |  | Assignment of Advisory Agreement made as of the 12th day of December 2013 by Cresud S.A.C.Y.F. y A. to Brasilagro Companhia Brasileira de Propriedades Agrícolas                                                                                                       
|              | 
|8.01          |  | List of subsidiaries                                                                                                                                                                                                                                                   
|              | 
|12.1          |  | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                
|              | 
|12.2          |  | Certification of the Chief Administrative Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                           
|              | 
|13.1          |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                 
|              | 
|13.2          |  | Certification of the Chief Administrative Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                            

There are omitted from the exhibits filed with or incorporated by reference into this Annual Report certain
promissory notes and other instruments and agreements with respect to our long-term debt, none of which authorizes securities in a total amount that exceeds 10% of our total assets. In addition, certain exhibits to agreements filed with this Annual
Report have been omitted. We hereby agree to furnish to the Commission copies of any such omitted promissory notes, other instruments or agreements and exhibits as the Commission requests.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure, other
than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely
within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.



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SIGNATURES

The registrant hereby certifies that it meets all the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this Annual Report on Form 20-F on its behalf.



BRASILAGRO  COMPANHIA BRASILEIRA DE PROPRIEDADES AGRÍCOLAS
 Date: October 31, 2014/s/ JULIO CESAR DE TOLEDO PIZA NETOName: Julio Cesar de Toledo Piza NetoTitle: Chief Executive Officer and Investor Relations Officer




Date: October 31, 2014/s/ GUSTAVO JAVIER LOPEZName: Gustavo Javier LopezTitle: Chief Administrative Officer




---

##### Table of Contents



Financial Statements

Brasilagro Companhia Brasileira

de Propriedades
Agrícolas

June 30, 2014



---

##### Table of Contents

Brasilagro Companhia Brasileira de Propriedades Agrícolas

Consolidated Financial Statements

June 30, 2014

Contents



|                                                             |  |     
|------------------------------------------------------------ |  | ----
|Report of Independent Registered Public Accounting Firm      |  | F-2 
|                                                             |  |     
|Consolidated Financial statements                            |  |     
|                                                             |  |     
|Consolidated Balance sheets                                  |  | F-4 
|Consolidated Statements of operations                        |  | F-6 
|Consolidated Statements of other comprehensive income (loss) |  | F-7 
|Consolidated Statements of changes in equity                 |  | F-8 
|Consolidated Statements of cash flows                        |  | F-9 
|Consolidated Notes to the financial statements               |  | F-10



F-1



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Brasilagro 
Companhia Brasileira de Propriedades Agrícolas

We have audited the accompanying consolidated balance sheets of Brasilagro  Companhia
Brasileira de Propriedades Agrícolas and subsidiaries as of June 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for the years then ended . These
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Companys internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Brasilagro 
Companhia Brasileira de Propriedades Agrícolas and subsidiaries as of June 30, 2014 and 2013, and the consolidated results of their operations and their cash flows for the years then ended , in conformity with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board  IASB.

São Paulo, Brazil

October 29, 2014

ERNST & YOUNG

Auditores Independentes S.S.

CRC 2SP-015.199/O-6

Daniel G. Maranhão Jr.

Accountant CRC 1SP215.856/O-5



F-2



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Brasilagro Companhia
Brasileira de Propriedades Agrícolas

In our opinion, the consolidated balance sheet as of June 30, 2012 and the related consolidated
statement of operations, of comprehensive income (loss), of changes in equity and of cash flows for the year then ended present fairly, in all material respects, the financial position of Brasilagro Companhia Brasileira de Propriedades
Agrícolas and its subsidiaries at June 30, 2012, and the results of their operations and their cash flows for the year then ended, in conformity with International Financial Reporting Standards as issued by the International Accounting
Standards Board. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in
accordance with the standards of the Public Company Accounting Oversight Board (United States) and International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

São Paulo  Brazil

October 5, 2012

PricewaterhouseCoopers

Auditores Independentes



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Consolidated Balance sheets

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                                           |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|------------------------------------------ |  | ----- | -- |  | ---- |  | ------- | ---- |  |  | ------- |  |  |  | ------- | 
|                                           |  | Notes |    |  | 2014 |  |         | 2013 |  |  | 2012    | 
|Assets                                     |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|Current                                    |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|Cash and cash equivalents                  |  |       | 6  |  |      |  | 86,745  |      |  |  | 75,694  |  |  |  | 67,464  | 
|Marketable securities                      |  |       | 6  |  |      |  | 21,532  |      |  |  | 9,244   |  |  |  |        | 
|Trade accounts receivable                  |  |       | 8  |  |      |  | 65,010  |      |  |  | 131,102 |  |  |  | 60,655  | 
|Inventories                                |  |       | 10 |  |      |  | 40,210  |      |  |  | 28,805  |  |  |  | 72,558  | 
|Biological assets                          |  |       | 11 |  |      |  | 1,421   |      |  |  | 1,201   |  |  |  | 4,111   | 
|Recoverable taxes                          |  |       | 9  |  |      |  | 3,749   |      |  |  | 7,655   |  |  |  | 9,331   | 
|Derivative financial instruments           |  |       | 7  |  |      |  | 18,255  |      |  |  | 17,081  |  |  |  | 4,327   | 
|Transactions with related parties          |  |       | 33 |  |      |  | 723     |      |  |  | 347     |  |  |  |        | 
|Other assets                               |  |       |    |  |      |  | 442     |      |  |  | 430     |  |  |  | 710     | 
|                                           |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|                                           |  |       |    |  |      |  | 238,087 |      |  |  | 271,559 |  |  |  | 219,156 | 
|                                           |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|Noncurrent assets                          |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|Biological assets                          |  |       | 11 |  |      |  | 31,202  |      |  |  | 36,656  |  |  |  | 31,931  | 
|Restricted marketable securities           |  |       | 12 |  |      |  | 13,782  |      |  |  | 17,988  |  |  |  | 23,197  | 
|Receivables from related parties           |  |       | 33 |  |      |  | 26,068  |      |  |  |        |  |  |  |        | 
|Recoverable taxes                          |  |       | 9  |  |      |  | 29,849  |      |  |  | 25,736  |  |  |  | 22,803  | 
|Deferred taxes                             |  |       | 22 |  |      |  | 43,554  |      |  |  | 25,216  |  |  |  | 14,960  | 
|Derivative financial instruments           |  |       | 7  |  |      |  | 63      |      |  |  | 1,714   |  |  |  |        | 
|Trade accounts receivable                  |  |       | 8  |  |      |  | 37,453  |      |  |  | 33,729  |  |  |  | 12,759  | 
|Investment properties                      |  |       | 13 |  |      |  | 334,803 |      |  |  | 339,108 |  |  |  | 391,907 | 
|Other assets                               |  |       |    |  |      |  | 4,644   |      |  |  | 1,633   |  |  |  | 268     | 
|Investments in unquoted equity instruments |  |       | 14 |  |      |  | 50,369  |      |  |  | 70      |  |  |  | 410     | 
|Property, plant and equipment              |  |       | 16 |  |      |  | 13,542  |      |  |  | 14,851  |  |  |  | 15,630  | 
|Intangible assets                          |  |       | 15 |  |      |  | 4,966   |      |  |  | 2,570   |  |  |  | 2,741   | 
|                                           |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|                                           |  |       |    |  |      |  | 590,295 |      |  |  | 499,271 |  |  |  | 516,606 | 
|                                           |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 
|Total assets                               |  |       |    |  |      |  | 828,382 |      |  |  | 770,830 |  |  |  | 735,762 | 
|                                           |  |       |    |  |      |  |         |      |  |  |         |  |  |  |         | 



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Consolidated Balance sheets

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|-------------------------------------------- |  | ----- | -- |  | ---- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                             |  | Notes |    |  | 2014 |  |         | 2013 |  |  | 2012    |  
|Liabilities and equity                       |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Current Liabilities                          |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Trade accounts payable                       |  |       | 18 |  |      |  | 8,158   |      |  |  | 7,777   |   |  |  | 4,151   |  
|Loans and financing                          |  |       | 19 |  |      |  | 62,253  |      |  |  | 44,929  |   |  |  | 43,067  |  
|Labor obligations                            |  |       |    |  |      |  | 8,730   |      |  |  | 8,752   |   |  |  | 7,436   |  
|Taxes payable                                |  |       | 20 |  |      |  | 6,501   |      |  |  | 2,306   |   |  |  | 3,102   |  
|Dividends payable                            |  |       |    |  |      |  | 25      |      |  |  | 1,963   |   |  |  | 2       |  
|Derivative financial instruments             |  |       | 7  |  |      |  | 204     |      |  |  | 2,860   |   |  |  | 8,307   |  
|Payables for purchase of farms               |  |       | 17 |  |      |  | 44,820  |      |  |  | 43,650  |   |  |  | 40,858  |  
|Transactions with related parties            |  |       | 33 |  |      |  | 33,237  |      |  |  | 183     |   |  |  |        |  
|Onerous contracts                            |  |       |    |  |      |  | 579     |      |  |  |        |   |  |  |        |  
|Advances from customers                      |  |       |    |  |      |  | 15,038  |      |  |  | 2,124   |   |  |  | 4,490   |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|                                             |  |       |    |  |      |  | 179,545 |      |  |  | 114,544 |   |  |  | 111,413 |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Noncurrent liabilities                       |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Loans and financing                          |  |       | 19 |  |      |  | 57,909  |      |  |  | 56,924  |   |  |  | 51,294  |  
|Taxes payable                                |  |       | 20 |  |      |  | 2,482   |      |  |  | 5,812   |   |  |  | 2,695   |  
|Derivative financial instruments             |  |       | 7  |  |      |  |        |      |  |  | 1,140   |   |  |  | 10,209  |  
|Provision for legal claims                   |  |       | 31 |  |      |  | 3,573   |      |  |  | 4,802   |   |  |  | 1,183   |  
|Other liabilities                            |  |       |    |  |      |  | 967     |      |  |  | 623     |   |  |  |        |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|                                             |  |       |    |  |      |  | 64,931  |      |  |  | 69,301  |   |  |  | 65,381  |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Total liabilities                            |  |       |    |  |      |  | 244,476 |      |  |  | 183,845 |   |  |  | 176,794 |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Equity                                       |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Attributable to equity holders of the parent |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Capital                                      |  |       | 23 |  |      |  | 584,224 |      |  |  | 584,224 |   |  |  | 584,224 |  
|Capital reserve                              |  |       |    |  |      |  | 4,201   |      |  |  | 3,385   |   |  |  | 2,134   |  
|Treasury shares                              |  |       |    |  |      |  | (1,934  | )    |  |  |        |   |  |  |        |  
|Income reserves                              |  |       |    |  |      |  |        |      |  |  | 6,296   |   |  |  |        |  
|Other reserve                                |  |       |    |  |      |  | 8,403   |      |  |  | (6,920  | ) |  |  | (6,920  | )
|Accumulated losses                           |  |       |    |  |      |  | (10,988 | )    |  |  |        |   |  |  | (20,470 | )
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Total equity                                 |  |       |    |  |      |  | 583,906 |      |  |  | 586,985 |   |  |  | 558,968 |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Total liabilities and equity                 |  |       |    |  |      |  | 828,382 |      |  |  | 770,830 |   |  |  | 735,762 |  
|                                             |  |       |    |  |      |  |         |      |  |  |         |   |  |  |         |  

See accompanying notes.



F-5



---

##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Consolidated Statements of operations

Year ended June 30,
2014

(In thousands of reais, except if stated otherwise)





|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|-------------------------------------------------------------------------------------------------- |  | ----- | -- |  | ---- |  | -------- | ---- |  |  | -------- | - |  |  | -------- | -
|                                                                                                   |  | Notes |    |  | 2014 |  |          | 2013 |  |  | 2012     |  
|Net revenue                                                                                        |  |       | 25 |  |      |  | 131,314  |      |  |  | 185,647  |   |  |  | 146,218  |  
|Gain on sale of farms                                                                              |  |       | 8  |  |      |  | 21,845   |      |  |  | 54,815   |   |  |  | 12,987   |  
|Changes in fair value of biological assets and agricultural products                               |  |       | 11 |  |      |  | 1,092    |      |  |  | 2,289    |   |  |  | (417     | )
|(Impairment) Reversal of impairment of net realizable value of agricultural products after harvest |  |       |    |  |      |  | (2,043   | )    |  |  | 1,659    |   |  |  | (2,663   | )
|Cost of sales                                                                                      |  |       | 26 |  |      |  | (138,535 | )    |  |  | (170,643 | ) |  |  | (136,447 | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Gross profit                                                                                       |  |       |    |  |      |  | 13,673   |      |  |  | 73,767   |   |  |  | 19,678   |  
|Selling expenses                                                                                   |  |       | 26 |  |      |  | (10,239  | )    |  |  | (14,028  | ) |  |  | (4,015   | )
|General and administrative expenses                                                                |  |       | 26 |  |      |  | (30,378  | )    |  |  | (29,233  | ) |  |  | (28,892  | )
|Other operating income (expenses), net                                                             |  |       |    |  |      |  | 285      |      |  |  | (3,539   | ) |  |  | 10       |  
|Equity pick up                                                                                     |  |       |    |  |      |  | (704     | )    |  |  |         |   |  |  |         |  
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Operating income (loss)                                                                            |  |       |    |  |      |  | (27,363  | )    |  |  | 26,967   |   |  |  | (13,219  | )
|Financial income (expenses), net                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Financial income                                                                                   |  |       | 28 |  |      |  | 40,051   |      |  |  | 38,000   |   |  |  | 38,073   |  
|Financial expenses                                                                                 |  |       | 28 |  |      |  | (41,611  | )    |  |  | (38,591  | ) |  |  | (44,299  | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Profit (loss) before income and social contribution taxes                                          |  |       |    |  |      |  | (28,923  | )    |  |  | 26,376   |   |  |  | (19,445  | )
|Income and social contribution taxes                                                               |  |       | 29 |  |      |  | 15,561   |      |  |  | 2,351    |   |  |  | 12,845   |  
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Profit (loss) for the year                                                                         |  |       |    |  |      |  | (13,362  | )    |  |  | 28,727   |   |  |  | (6,600   | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Attributable to                                                                                    |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Equity holders of the parent                                                                       |  |       |    |  |      |  | (13,362  | )    |  |  | 28,727   |   |  |  | (5,572   | )
|Non-controlling interests                                                                          |  |       |    |  |      |  |         |      |  |  |         |   |  |  | (1,028   | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|                                                                                                   |  |       |    |  |      |  | (13,362  | )    |  |  | 28,727   |   |  |  | (6,600   | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Basic earnings (loss) per share-reais                                                              |  |       | 30 |  |      |  | (0.23    | )    |  |  | 0.49     |   |  |  | (0.10    | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  
|Diluted earnings (loss) per share-reais                                                            |  |       | 30 |  |      |  | (0.23    | )    |  |  | 0.49     |   |  |  | (0.10    | )
|                                                                                                   |  |       |    |  |      |  |          |      |  |  |          |   |  |  |          |  

See accompanying notes.



F-6



---

##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Consolidated Statements of other comprehensive income (loss)

Year ended June 30, 2014

(In thousands of reais, except if
stated otherwise)





|                                                                                                    |  |      |          |   |      |  |        |      |  |  |        |  
|--------------------------------------------------------------------------------------------------- |  | ---- | -------- | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                                                    |  | 2014 |          |   | 2013 |  |        | 2012 | 
|Profit (loss) for the year                                                                          |  |      | (13,362  | ) |      |  | 28,727 |      |  |  | (6,600 | )
|Comprehensive loss to be reclassified to statement of operation for the year in subsequent periods: |  |      |          |   |      |  |        |      |  |  |        |  
|Currency translation adjustment from investment in joint venture                                    |  |      | (3,335   | ) |      |  |       |      |  |  |       |  
|                                                                                                    |  |      |          |   |      |  |        |      |  |  |        |  
|Total comprehensive income (loss) for the year                                                      |  |      | (16,697  | ) |      |  | 28,727 |      |  |  | (6,600 | )
|                                                                                                    |  |      |          |   |      |  |        |      |  |  |        |  
|Attributable to                                                                                     |  |      |          |   |      |  |        |      |  |  |        |  
|Equity holders of the parent                                                                        |  |      | (16,697) |   |      |  | 28,727 |      |  |  | (5,572 | )
|Non-controlling interests                                                                           |  |      |         |   |      |  |       |      |  |  | (1,028 | )





F-7



---

##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Consolidated Statements of changes in equity

Year ended
June 30, 2014

(In thousands of reais, except if stated otherwise)









|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|--------------------------------------------------------------------------------- |  | -------------------------------------------- | ---- |  | ------- |  | ------- | -------------- |  |  | -------------- |  |  | --------------- | ------ | - | -------------------------------- |  | ---- | -------- |  |  | ------------ | - |  | ----------------- | ------ | - | ----------- |  | ------ | --------------------------- |  |  | ------------ | - |  |  | ------- | - |  |  | ------- | - |  |  | ------- | -
|                                                                                  |  | Attributable to equity holders of the parent |     
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  | Income Reserves |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             | 
|                                                                                  |  | Note                                         |      |  | Capital |  |         | CapitalReserve |  |  | Treasuryshares |  |  | LegalReserve    |        |   | ReserveforInvestmentandexpansion |  |      | Dividend |  |  | Otherreserve |   |  | Accumulatedlosses |        |   | TotalEquity |  |        | Non-controllingshareholders |  |  | Consolidated |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|At June 30, 2011                                                                  |  |                                              |      |  |         |  | 584,224 |                |  |  | 996            |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  | (14,898      | ) |  |  | 570,322 |   |  |  | 6,601   |   |  |  | 576,923 |  
|Loss for the year                                                                 |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  | (5,572       | ) |  |  | (5,572  | ) |  |  | (1,028  | ) |  |  | (6,600  | )
|Share based compensation                                                          |  |                                              | 27   |  |         |  |        |                |  |  | 1,138          |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  | 1,138   |   |  |  |        |   |  |  | 1,138   |  
|Increase in non-controlling interest due to change in interest in Jaborandi Ltda. |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  | (1,135 | )                           |  |  |             |   |  |  | (1,135  | ) |  |  | 1,135   |   |  |  |        |  
|Capital increase                                                                  |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  |        |   |  |  | 7,438   |   |  |  | 7,438   |  
|Acquisition of Jaborandi S.A. and Jaborandi Ltda.                                 |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  | (5,785 | )                           |  |  |             |   |  |  | (5,785  | ) |  |  |        |   |  |  | (5,785  | )
|Purchase of non-controlling interest                                              |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  |        |   |  |  | (14,176 | ) |  |  | (14,176 | )
|Other                                                                             |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  |        |   |  |  | 30      |   |  |  | 30      |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|At June 30, 2012                                                                  |  |                                              |      |  |         |  | 584,224 |                |  |  | 2,134          |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  | (6,920 | )                           |  |  | (20,470      | ) |  |  | 558,968 |   |  |  |        |   |  |  | 558,968 |  
|Profit for the year                                                               |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  | 28,727       |   |  |  | 28,727  |   |  |  |        |   |  |  | 28,727  |  
|Share-based payment                                                               |  |                                              | 27   |  |         |  |        |                |  |  | 1,251          |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  | 1,251   |   |  |  |        |   |  |  | 1,251   |  
|Set-up of legal reserve                                                           |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  | 413  |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  | (413         | ) |  |  |        |   |  |  |        |   |  |  |        |  
|Mandatory dividends                                                               |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  | (1,961       | ) |  |  | (1,961  | ) |  |  |        |   |  |  | (1,961  | )
|Proposed dividends                                                                |  |                                              | 23.f |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   | 3,922  |   |             |  |       |                             |  |  | (3,922       | ) |  |  |        |   |  |  |        |   |  |  |        |  
|Set-up of reserve for reinvestment and expansion                                  |  |                                              | 23.f |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  | 1,961        |   |  |                   |       |   |             |  |       |                             |  |  | (1,961       | ) |  |  |        |   |  |  |        |   |  |  |        |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|At June 30, 2013                                                                  |  |                                              |      |  |         |  | 584,224 |                |  |  | 3,385          |  |  |                 |       |   |                                  |  | 413  |          |  |  | 1,961        |   |  |                   | 3,922  |   |             |  | (6,920 | )                           |  |  |             |   |  |  | 586,985 |   |  |  |        |   |  |  | 586,985 |  
|Loss for the year                                                                 |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  | (13,362      | ) |  |  | (13,362 | ) |  |  |        |   |  |  | (13,362 | )
|Absorption of loss                                                                |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  | (413 | )        |  |  | (1,961       | ) |  |                   |       |   |             |  |       |                             |  |  | 2,374        |   |  |  |        |   |  |  |        |   |  |  |        |  
|Share-based payment                                                               |  |                                              | 27   |  |         |  |        |                |  |  | 816            |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  | 816     |   |  |  |        |   |  |  | 816     |  
|Treasury stock acquired                                                           |  |                                              | 23.h |  |         |  |        |                |  |  |               |  |  |                 | (1,934 | ) |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  |       |                             |  |  |             |   |  |  | (1,934  | ) |  |  |        |   |  |  | (1,934  | )
|Dividends paid                                                                    |  |                                              |      |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   | (3,922 | ) |             |  |       |                             |  |  |             |   |  |  | (3,922  | ) |  |  |        |   |  |  | (3,922  | )
|Currency translation adjustment from investment in joint venture                  |  |                                              | 23.g |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  | (3,335 | )                           |  |  |             |   |  |  | (3,335  | ) |  |  |        |   |  |  | (3,335  | )
|Gain from bargain purchase  Cresca                                               |  |                                              | 23.d |  |         |  |        |                |  |  |               |  |  |                 |       |   |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  | 18,658 |                             |  |  |             |   |  |  | 18,658  |   |  |  |        |   |  |  | 18,658  |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  
|At June 30, 2014                                                                  |  |                                              |      |  |         |  | 584,224 |                |  |  | 4,201          |  |  |                 | (1,934 | ) |                                  |  |     |          |  |  |             |   |  |                   |       |   |             |  | 8,403  |                             |  |  | (10,988      | ) |  |  | 583,906 |   |  |  |        |   |  |  | 583,906 |  
|                                                                                  |  |                                              |      |  |         |  |         |                |  |  |                |  |  |                 |        |   |                                  |  |      |          |  |  |              |   |  |                   |        |   |             |  |        |                             |  |  |              |   |  |  |         |   |  |  |         |   |  |  |         |  



F-8



---

##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Consolidated Statements of cash flows

Year ended June 30,
2014

(In thousands of reais, except if stated otherwise)







|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|---------------------------------------------------------------------------------------------------------- |  | --------- |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                                                                           |  | Notes     |  | 2014 |         |   | 2013 |  |         | 2012 | 
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                       |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Profit (loss) for the year                                                                                 |  |           |  |      | (13,362 | ) |      |  | 28,727  |      |  |  | (6,600  | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Adjustments to reconcile profit (loss) for the year                                                        |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Depreciation and amortization                                                                              |  | 26        |  |      | 21,431  |   |      |  | 27,997  |      |  |  | 27,398  |  
|Gain on sale of farm                                                                                       |  | 13        |  |      | (21,845 | ) |      |  | (54,815 | )    |  |  | (12,987 | )
|Share based compensation plan                                                                              |  | 27        |  |      | 816     |   |      |  | 1,251   |      |  |  | 1,138   |  
|Residual value of property, plant and equipment sold                                                       |  | 16        |  |      | 830     |   |      |  | 2,061   |      |  |  | 101     |  
|Write-off of capitalized cost in investment properties                                                     |  |           |  |      | 2,098   |   |      |  |        |      |  |  |        |  
|Equity pick-up                                                                                             |  |           |  |      | 704     |   |      |  |        |      |  |  |        |  
|Unrealized (gain) loss on derivatives                                                                      |  | 28        |  |      | (1,116  | ) |      |  | (11,659 | )    |  |  | 12,756  |  
|Unrealized foreign exchange, monetary variation and financial charges                                      |  | 28        |  |      | 180     |   |      |  | 4,383   |      |  |  | 3,845   |  
|(Gain) on remeasurement of receivables from sale of farms                                                  |  | 28        |  |      | (4,965  | ) |      |  | (6,981  | )    |  |  | (6,682  | )
|Deferred income and social contribution taxes                                                              |  | 29        |  |      | (18,338 | ) |      |  | (10,258 | )    |  |  | (14,686 | )
|(Gains) losses arising from changes in fair value of biological assets and agricultural products           |  | 11        |  |      | (1,092  | ) |      |  | (2,289  | )    |  |  | 417     |  
|Impairment (reversal of impairment) of net realizable value of agricultural products after harvest         |  |           |  |      | 2,043   |   |      |  | (1,659  | )    |  |  | 2,663   |  
|Allowance for doubtful accounts                                                                            |  | 8         |  |      | 525     |   |      |  | 490     |      |  |  | 952     |  
|Onerous contracts                                                                                          |  |           |  |      | 579     |   |      |  |        |      |  |  |        |  
|Provision for legal claims                                                                                 |  | 31        |  |      | (1,229  | ) |      |  | 3,619   |      |  |  | 951     |  
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|                                                                                                           |  |           |  |      | (32,741 | ) |      |  | (19,133 | )    |  |  | 9,266   |  
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Change in working capital                                                                                  |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Trade accounts receivable                                                                                  |  |           |  |      | 65,235  |   |      |  | (48,751 | )    |  |  | (24,967 | )
|Inventories                                                                                                |  |           |  |      | (14,072 | ) |      |  | 43,417  |      |  |  | (662    | )
|Biological assets                                                                                          |  |           |  |      | 1,337   |   |      |  | (10,334 | )    |  |  | (2,737  | )
|Recoverable taxes                                                                                          |  |           |  |      | 882     |   |      |  | (516    | )    |  |  | (948    | )
|Derivative financial instruments                                                                           |  |           |  |      | (1,971  | ) |      |  | (15,520 | )    |  |  | 3,901   |  
|Prepaid assets                                                                                             |  |           |  |      |        |   |      |  |        |      |  |  | (107    | )
|Other receivables                                                                                          |  |           |  |      | (2,866  | ) |      |  | (1,246  | )    |  |  | 982     |  
|Trade accounts payable                                                                                     |  |           |  |      | (237    | ) |      |  | 3,718   |      |  |  | 2,069   |  
|Related parties                                                                                            |  |           |  |      | (5,557  | ) |      |  |        |      |  |  |        |  
|Taxes payable                                                                                              |  |           |  |      |        |   |      |  | 2,321   |      |  |  | 1,709   |  
|Income tax and social contribution paid                                                                    |  |           |  |      | (366    | ) |      |  |        |      |  |  |        |  
|Labor obligations                                                                                          |  |           |  |      | (22     | ) |      |  | 1,316   |      |  |  | 2,635   |  
|Advance from customers                                                                                     |  |           |  |      | 12,914  |   |      |  | (2,366  | )    |  |  |        |  
|Other liabilities                                                                                          |  |           |  |      | 344     |   |      |  | 622     |      |  |  | (1,832  | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Net cash flows from (used in) operating activities                                                         |  |           |  |      | 22,880  |   |      |  | (46,472 | )    |  |  | (10,691 | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                       |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Additions to property, plant and equipment and intangible assets                                           |  | 15 and 16 |  |      | (2,413  | ) |      |  | (3,383  | )    |  |  | (4,338  | )
|Cash paid on subsequent expenditures on investment properties                                              |  | 13        |  |      | (20,859 | ) |      |  | (24,957 | )    |  |  | (29,806 | )
|Redemption of (investment in) marketable securities                                                        |  |           |  |      | 1,222   |   |      |  | (4,035  | )    |  |  |        |  
|Capital increase in joint venture                                                                          |  |           |  |      | (14,463 | ) |      |  |        |      |  |  |        |  
|Acquisition of joint venture Cresca                                                                        |  |           |  |      | (8,592  | ) |      |  |        |      |  |  |        |  
|Cash received from sales of farms                                                                          |  |           |  |      | 35,255  |   |      |  | 86,460  |      |  |  | 9,769   |  
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Net cash flows from (used in) investing activities                                                         |  |           |  |      | (9,850  | ) |      |  | 54,085  |      |  |  | (24,375 | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                       |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Advances for future capital increase received from Jaborandi Ltda. and Jaborandi S.A. minority shareholder |  |           |  |      |        |   |      |  |        |      |  |  | 7,438   |  
|Payments of installments of financed acquisition of farm                                                   |  |           |  |      | (2,239  | ) |      |  |        |      |  |  | (18,648 | )
|Proceeds from loans and financing                                                                          |  |           |  |      | 56,723  |   |      |  | 40,407  |      |  |  | 31,600  |  
|Interest paid on loans and financing                                                                       |  |           |  |      | (2,224  | ) |      |  | (3,097  | )    |  |  | (3,179  | )
|Payment of loans and financing                                                                             |  |           |  |      | (44,100 | ) |      |  | (36,693 | )    |  |  | (37,297 | )
|Treasury stock acquired                                                                                    |  |           |  |      | (1,934  | ) |      |  |        |      |  |  |        |  
|Dividends paid                                                                                             |  |           |  |      | (5,883  | ) |      |  |        |      |  |  |        |  
|Acquisition of rights receivables from loans.                                                              |  | 14        |  |      | (2,322  | ) |      |  |        |      |  |  | (12,999 | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Net cash flows from (used in) financing activities                                                         |  |           |  |      | (1,979  | ) |      |  | 617     |      |  |  | (33,085 | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Increase (decrease) in cash and cash equivalents                                                           |  |           |  |      | 11,051  |   |      |  | 8,230   |      |  |  | (68,151 | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Cash and cash equivalents at beginning of year                                                             |  | 6         |  |      | 75,694  |   |      |  | 67,464  |      |  |  | 135,615 |  
|Cash and cash equivalents at end of year                                                                   |  | 6         |  |      | 86,745  |   |      |  | 75,694  |      |  |  | 67,464  |  
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|                                                                                                           |  |           |  |      | 11,051  |   |      |  | 8,230   |      |  |  | (68,151 | )
|                                                                                                           |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Non-cash transactions                                                                                      |  |           |  |      |         |   |      |  |         |      |  |  |         |  
|Financed purchase of property, plant and equipment                                                         |  |           |  |      |        |   |      |  |        |      |  |  | 3,720   |  
|Financed purchase of farms                                                                                 |  |           |  |      |        |   |      |  |        |      |  |  | 21,041  |  

See accompanying notes.



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)







|1. | General information
|-- | -------------------

Brasilagro Companhia Brasileira de Propriedades Agrícolas
(the Company or Brasilagro) was incorporated on September 23, 2005 and is headquartered at Avenida Brigadeiro Faria Lima, 1309, in São Paulo with branches in the States of Bahia, Goiás, Mato Grosso, Minas
Gerais and Piauí and in Paraguay in the State of Boquerón.

Pursuant to its articles of incorporation, the Companys
activities include: (a) agriculture, cattle raising and forestry activities of any type and nature and rendering directly or indirectly related services, (b) the import and export of agricultural products and inputs and those related to
cattle raising activity, (c) the purchase, sale and/or rental of properties, land, buildings and real estate in rural and/or urban areas, (d) real estate brokerage involving any type of operations, (e) holding interest, as member, in
other companies and commercial ventures of any nature, in Brazil and/or abroad, directly or indirectly related to the purposes described herein, and (f) management of its own and third-party assets.

The Company and its subsidiaries have ten farms in five Brazilian states and one jointly-controlled farm in Paraguay, with total area of
311,582 hectares, including 17,699 leased hectares and 141,931 hectares in joint venture. The Company aims to consolidate its position as one of the main companies in the agribusiness segment in Brazil and/or abroad by acquiring farms and selling
them once the intended potential valuation is achieved, by means of a strategy intended to expand production, leverage production process, and diversify geographies and production.

The activities of the subsidiaries Cremaq Ltda. (Cremaq), Engenho de Maracajú Ltda. (Engenho),
Imobiliária Jaborandi Ltda. (Jaborandi), Araucária Ltda. (Araucária), Mogno Ltda. (Mogno), Cajueiro Ltda. (Cajueiro), Ceibo Ltda. (Ceibo) and Flamboyant Ltda.
(Flamboyant) comprise the purchase and sale of properties, land, buildings and real estate in rural and/or urban areas. As permitted in their respective by-laws and articles of organization, until the real estate assets belonging to
these companies are sold, the assets may be leased to third parties, but only as a strategy for real estate appreciation. The activities of the subsidiary Jaborandi Agrícola Ltda. comprise the lease of land, the sublease of land to third
parties, rendering of advisory services in the agricultural area, agriculture, cattle raising and forestry activities of any type and nature, and rendering of direct or indirect related services. All subsidiaries, as well as FIM Guardian Fund,
exclusive investment fund of the Company, are headquartered and operate in Brazil.

The activities of joint venture in company Cresca,
located in Paraguay, include agriculture, cattle raising and forestry activities of any type and nature, and rendering of direct or indirect related services, the import and export of agricultural products and inputs and those related to cattle
raising activity, the purchase, sale and/or rental of properties, land, buildings and real estate in rural and/or urban areas and financial transactions, purchase and sale of securities, shares and commodities.

Opportunity for new businesses are under analysis, but shall only be announced, in accordance with the Companys disclosure policy, when
technical and legal assessments and the related due diligence processes are completed.

As of the date hereof, the Company holds
(i) 7,181 hectares leased from third parties, and (ii) are not the legal owner of 26,530 hectares as the registration of ownership for these properties has not been finished.

On August 23, 2010, Opinion No. LA01, of August 19, 2010, issued by the Federal Attorney General (AGU) was approved by the
President of Brazil. The opinion addresses the purchase and lease of agricultural properties by Brazilian companies controlled by foreign individuals or legal entities holding the control of the capital stock of a company that owns land in Brazil.
The Attorney Generals opinion provides that Brazilian companies controlled by non-Brazilians require prior authorization to purchase agricultural properties and are subject to restrictions, including the following:



| | (i) | the agricultural properties shall be used for agricultural, cattle raising or industrial activities, and shall be previously approved by the Ministry of Agrarian Development or by the Ministry of Development, Industry
and Foreign Trade;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | (ii) | the total area of agricultural properties owned by foreigners shall not exceed the greater of (A) one fourth of the area of the municipality where the property is located; or (B) the sum of the areas held by
foreigners of the same nationality shall not exceed 40% of the area of the municipality where the property is located; and
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | the acquisition shall not exceed one hundred (100) indefinite exploration modules, which are measurement units adopted within different Brazilian regions that range from five to 100 hectares, depending on the
region.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New acquisitions or new lease agreements of agricultural properties by companies controlled by non-Brazilians
within the above-mentioned limits must be previously approved by INCRA  Instituto Nacional de Colonização e Reforma Agrária. The request for the approval must be filed before the
Regional Branch of INCRA (Superintendência Regional) of the State where the property is located. After that, INCRA will analyze the compliance with the above-mentioned requirements and if the transaction is approved by INCRA, it will issue a
certificate of approval. The purchase and lease of agricultural properties beyond the limits of areas and percentages mentioned above require prior authorization from the Brazilian Congress.

In both cases, it is not possible to determine an estimated time frame for the approval procedure, since up to the date of these financial
statements, there are no known cases of certificates having been granted. Additionally, there is no judgment so far by the Brazilian courts on the validity and constitutionality of the contents of the Attorney Generals Opinion. As of
June 30, 2014, 77.19% of Company common shares were held by foreigners.

On December 11, 2012, São Paulos General
Comptroller of Justice (Corregedoria Geral de Justiça do Estado de São Paulo) issued the Opinion no 461/2012-E, establishing that entities providing notary and registrar services located in the State of São Paulo are exempt from
observing certain restrictions and requirements imposed by Law no 5.709/71 and Decree no 74.965/74, regarding Brazilian companies with the majority of the capital stock composed of foreigners residing outside of Brazil or legal entities incorporated
abroad. However, in April 2013, the Court of Appeals granted an injunction suspending the effects of Opinion no 461/2012-E, based on the lawsuit filed by INCRA and the Federal Government against the Opinion no 461/2012-E.



|2. | Summary of significant accounting polices
|-- | -----------------------------------------

The significant accounting polices applied in
the preparation of these financial statements are described below. These polices are consistently applied to all years presented, unless otherwise stated.



|2.1. | Basis of preparation
|---- | --------------------

On October 29, 2014, the Companys Executive Board,
Fiscal Council, and Board of Directors approved the Company consolidated financial statements and authorized their issuance.

The
consolidated financial statements have been prepared and are presented in accordance with International Financial Reporting Standards (IFRS) issued, by theInternational Accounting Standards Board (IASB). All the references to IFRS
in these financial statements correspond to the IFRS issued by the IASB.

The consolidated financial statements have been prepared on the
historical cost basis, except where otherwise stated, as described in the summary of significant accounting policies.

The financial
statements have been prepared in the ordinary course of business. During the preparation of the financial statements Management assesses the Companys ability to continue operating as going concern. The Company is not in default regarding its
debts at the date of issuance of these financial statements and Management did not identify any significant uncertainty on the Companys ability to continue as a going concern in the next 12 months.

The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires that Management use
judgment in the process of application of the Companys accounting policies. Those areas requiring a higher level of judgment and with more complexity, as well as the areas in which assumptions and estimates are significant for the financial
statements, are disclosed in Note 3.



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Non-financial data included in these financial statements, such as sales volume, planted and leased area, number of farms, insurance and
environment were not examined by the independent auditors.



| | a) | Basis of consolidation
| | -- | ----------------------

The consolidated financial statements comprise the financial
statements of the parent Company and its subsidiaries at June 30, 2014, 2013 and 2012, as presented below:



|                            |  |                               |        |  |      |  |        |      |  |  |        | 
|--------------------------- |  | ----------------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                            |  | Interest in total capital  % |       
|                            |  | 2014                          |        |  | 2013 |  |        | 2012 | 
|Araucária                   |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Cremaq                      |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Engenho de Maracaju         |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Imobiliária Jaborandi       |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Jaborandi Agrícola Ltda.    |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Cajueiro                    |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Mogno                       |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Ceibo                       |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|Flamboyant                  |  |                               | 99.99  |  |      |  | 99.99  |      |  |  | 99.99  | 
|FIM Guardian Exclusive Fund |  |                               | 100.00 |  |      |  | 100.00 |      |  |  | 100.00 | 

The subsidiaries are fully consolidated from the date of acquisition, being consolidated up to the date in
which the control no longer exists. The financial statements of the subsidiaries are prepared for the same reporting period of the parent company, using consistent accounting policies. All intergroup balances, revenues and expenses are fully
eliminated in the consolidated financial statements.



|2.2. | Foreign currency translation
|---- | ----------------------------



| | a) | Functional and presentation currency
| | -- | ------------------------------------

Items included in the financial statements of each
of the Companys subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the functional currency), for which the functional and reporting currency is Brazilian Reais (R$). On
January 01, 2014, the company Cresca S.A. (joint venture), located in Paraguay, revaluated the most influencing currency on its transactions and concluded that the US dollar is the one which best reflects the economic environment in
which it operates. As from this date its functional currency is the US dollar.



| | b) | Transactions and balances in foreign currencies
| | -- | -----------------------------------------------

Foreign currency transactions are
translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuations when items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of operations.



| | c) | Group companies abroad
| | -- | ----------------------

In the preparation of the Company financial statements,
the financial statements of the joint venture, whose functional currency is the US dollar, are translated into reais as follows: a) balance sheet at the foreign exchange rate at year end and b) statement of operations, at the monthly average foreign
exchange rate.

Fair value adjustments to the carrying amount of the investment acquired in Cresca are expressed in Crescas
functional currency and translated at period-end foreign exchange rates.

The effects from variations in the foreign exchange rate
resulting from these translations are presented under Other comprehensive income in the Statement of Comprehensive Income and Other Reserve in the statement of changes Equity.



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|2.3. | Purchase ofjoint ventureinterest in transactions between entities under common control
|---- | --------------------------------------------------------------------------------------

As detailed in Note 14(b) the Company acquired interest in company Cresca S.A., a joint venture of its controlling shareholder.
Purchases of joint ventures interest (as well as of subsidiaries and affiliates) in transactions between entities under common control, may be recorded using the acquisition method. The consideration transferred for the acquisition of a
joint venture is the fair value of the assets acquired, liabilities assumed and equity instruments issued by the Company. The consideration transferred includes the fair value of assets and liabilities resulting from a contingent
consideration contract, when applicable.

Costs related to the acquisition are recorded in statements of operations for the year as
incurred. The Companys interest in the joint venture is measured at the fair value of identifiable assets acquired and liabilities assumed and contingent liabilities at the acquisition date, proportional to the Companys interest
in the joint venture.

When the total consideration transferred does not exceed the fair value of the joint venture acquired
net assets, the difference is directly recognized in equity as a contribution by the controlling shareholder, this is a transaction between shareholders.

The measurement and recording of the joint venture interest at its fair value is based on the economic substance of the interest
acquisition, in line with the strategy for expansion and development of land in border and international regions.

If the initial
accounting from a business combination is incomplete at the year-end in which such combination occurred, the Company records temporary amounts from the items whose recording is incomplete. These temporary amounts are adjusted during the measurement
period or the additional assets and liabilities are recognized to reflect the new information obtained in relation to the existing facts and circumstances at the acquisition date, which, if known, would have affected the amounts recognized at that
date.



|2.4. | Intangible assets  Service agreements
|---- | --------------------------------------

The service agreement with Cresca S.A. was
acquired from the controlling shareholder, separately from the purchase of interest in the joint venture, and recognized at the acquisition cost. The agreement has finite useful life and is recorded at cost less accumulated amortization. The
amortization is calculated during the estimated period in which the agreement shall generate benefits for the Company based on the apportionment of hectares opened by Cresca in each period in relation to total hectares yet to be opened, existing at
the date of the agreement acquisition.



|2.5. | Investments injoint venture
|---- | ---------------------------

Investments in joint venture are recorded
under the equity method.

Joint venture is an agreement whereby the parties sharing joint control are entitled to the net assets of the
joint ventures. Joint control is the contractual sharing of a control, existing only when decisions on the related activities require the unanimous consent of the parties.



|2.6. | Segment reporting
|---- | -----------------

Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, responsible for allocating resources and assessing performance of the operating segments, is the Executive Board, also responsible for making the
Groups strategic decisions.



|2.7. | Cash and cash equivalents and marketable securities
|---- | ---------------------------------------------------

Cash and cash equivalents include
cash, bank deposits, maturing within 90 days from the transactions date and other highly-liquid investments and short-term repurchase agreements for which there are no fines or other restrictions as to immediate redemption from the issuer of the
instrument cash equivalents are recorded at cost plus earnings accrued up to the balance sheet date, not exceeding market or realizable value.

Marketable securities include bank deposit certificates, Federal Government bonds, exclusive investment funds which are fully consolidated and
pledges. In addition, there are marketable securities provided as guarantee for loans and financing recorded in current and noncurrent assets based on the maturities of the referred loans and financing.



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Marketable securities are classified as available for sale. Considering the nature of the investments held by the Company, there are no
significant differences between their carrying amounts and their fair value calculated based on the interest up to the balance sheet date, on a pro-rata basis.

Maturities of investments (bank deposit certificates and repurchase agreements) may exceed 90 days from the date they are taken out, and may
have repurchase guarantee contractually provided by the financial institution issuer of the security, allowing the redemption of securities at the amount originally invested plus interest, with no penalty. They are classified as cash equivalents.

Fixed-income investments are intended to maintain the value of amounts held by the Company and not yet allocated to rural activities, and
are governed by a policy approved by the Board of Directors.

In the statement of cash flows, financing and investing activities include
only effective cash and cash equivalents transactions. Therefore, financed purchases and sales of assets are included in Notes 13, 16 and 19.



|2.8. | Financial assets
|---- | ----------------



|2.8.1 | Classification
|----- | --------------

For the years presented, the Company holds exclusively financial assets
classified as loans and receivables, assets available for sale and assets measured at fair value through profit or loss.



| | (a) | Financial assets measured at fair value through profit or loss
| | --- | --------------------------------------------------------------

Financial assets at fair
value through profit or loss comprise financial assets designated by the Company as at fair value through profit or loss upon initial recognition. A financial asset is classified in this category if acquired principally: (i) for the purpose of
selling in the short-term (ii) derivative financial instruments are also categorized as at fair value through profit or loss unless they qualify for hedge accounting or, (iii) if the measurement at fair value reduces or eliminates some
measurement inconsistence in accordance with the Companys financial management.

The Company designates certain financial assets at
the initial recognition at fair value through profit or loss. This designation cannot be changed later. These assets are limited to derivatives and receivables for the sale of farms, which consist of debt instruments recognized in the consolidated
balance sheet in Trade Accounts receivable.

Changes in fair value related to receivables for the sale of farms designated at
fair value through profit or loss are recognized in Gain (loss) on remeasurement of receivables from the sale of farms in financial income.



| | (b) | Loans and receivables
| | --- | ---------------------

The category includes loans granted and receivables which are
non-derivative financial assets with fixed or determinable payments, not quoted in an active market. They are included in current assets, except for maturities exceeding 12 months after the balance sheet date, which are classified as noncurrent
assets. The Groups loans and receivables comprise trade accounts receivable, other receivables and marketable securities given in guarantee to loans and financing. Loans and receivables are recorded at amortized cost, using the effective
interest rate method.

The amortization using the effective interest rate method is included in financial income, in the statement of
operations.



| | (c) | Available-for-sale Financial assets
| | --- | -----------------------------------

Available-for-sale assets financial are those non
derivative financial assets which are not classified as (a) loans and receivables, (b) investments held to maturity (c) financial assets at fair value through profit or loss. These financial assets include equity instruments and debt
bond. Debt bond in this category are those intended to be held for an indefinite period and which may be sold to meet the liquidity needs or as response to the changes in market conditions.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





After initial measurement, available-for-sale financial assets are measured at fair value, with unrealized gains and losses directly recognized
in the available-for-sale reserve in other comprehensive income until the investment is derecognized, except for impairment loss, the interest calculated using the effective interest method, and the gains or losses on foreign exchange on monetary
assets recognized in profit and loss for the period.

When the investment is derecognized or when there is an impairment loss, the
cumulative gains or losses previously recognized in other comprehensive income shall be recognized in profit and loss.



|2.8.2 | Recognition and measurement
|----- | ---------------------------

Financial assets are classified as financial assets at fair
value through profit or loss, loans and receivables or financial assets available for sale, as the case may be. The Company determines the classification of its financial assets upon their initial recognition, when it becomes a party to the
contractual provisions of the instrument.

Regular purchases and sales of financial assets are recognized on the trade-date  the
date on which the group commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets include cash and
cash equivalents, marketable securities, trade accounts receivable, receivable from sale of farm and derivative transactions, trade accounts payable, loans and financing, and accounts payable for acquisition.



|2.8.3 | Impairment of financial assets
|----- | ------------------------------



| | a) | Assets carried at amortized cost
| | -- | --------------------------------

The Group assesses at the end of each reporting period
whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as
a result of one or more events that occurred after the initial recognition of the asset (a loss event), that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets it
can be reliably estimated.

The criteria that the Group uses to determine and there is objective evidence of an impairment loss include:



| | (i) | significant financial difficulty of the issuer or debtor;
| | --- | ---------------------------------------------------------



| | (ii) | a breach of contract, such as a default or delinquency in interest or principal payments;
| | ---- | -----------------------------------------------------------------------------------------



| | (iii) | the Company, for economic or legal reasons relating to the borrowers financial difficulty, grants to the borrower a concession that the lender would not otherwise consider;
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | it becomes probable that the borrower will go bankrupt or undergo any other financial reorganization;
| | ---- | -----------------------------------------------------------------------------------------------------



| | (v) | the disappearance of an active market for that financial asset because of financial difficulties; or
| | --- | ----------------------------------------------------------------------------------------------------



| | (vi) | observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot be yet
identified with the individual financial assets in the portfolio, including:
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse changes in the payment status of borrowers in the portfolio; and
| | - |  | ------------------------------------------------------------------------

| |  |  | national or local economic conditions that correlate to defaults on the assets in the portfolio.
| | - |  | ------------------------------------------------------------------------------------------------



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash
flows (excluding future credit losses that have not been incurred) discounted at the financial assets original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the statement of
operations. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Company may
measure impairment based on an instruments fair value using an observable market price.

If, in a subsequent period, the amount of
the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtors credit rating), the reversal of the previously recognized impairment
loss is recognized in the statement of operations.



|2.9. | Derivative financial instruments
|---- | --------------------------------

The Company uses derivative financial instruments, as
forward currency contracts and forward commodities contracts against the risk of variation in the commodities prices and risk of variation in the foreign exchange rates, respectively.

Derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently
re-measured at their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument. The Company did not designate any derivative for hedge accounting.

Any gains or losses arising from changes in the fair value of derivatives during the year are recognized immediately in the statement of
operations. The fair value of derivative financial instruments is disclosed in Note 7.

Although the Group uses derivative financial
instruments for economic hedge purposes, it has not applied hedge accounting in the reported periods.



|2.10. | Trade accounts receivables
|----- | --------------------------

Trade accounts receivables are amounts due from customers
for the sale of goods and real estate (land) in the ordinary course of the Companys business. If collection is expected to be within one year, they are classified as current assets. They are presented as noncurrent assets.

Trade accounts receivables not related to the sale of farms are initially recognized at fair value, and subsequently measured at amortized
cost under the effective interest rate method, less allowance for doubtful accounts, if necessary.

Trade accounts receivables related to
the sale of farms for which the amount of cash receivable is contractually determined in reais, equivalent to a number of sacks of soybean, are designated at fair value through profit or loss at initial recognition. In this case, trade accounts
receivable are subsequently remeasured at each balance sheet date by applying the number of sacks of soybean to the quote of soybean for future delivery at the maturity date of each installment (or based on estimates and quotes of brokers when there
is no quote of soybean for future delivery at a specific maturity date), and by multiplying the resulting amount in US dollars by the exchange rate of US$ to R$ for future delivery also at the same maturity date (considering that future soybean
quotes are denominated in US$) and the resulting amount in Reais is discounted to present value. The gain (loss) on remeasurement of the receivable is recognized in Financial income under Gain (loss) on remeasurement of receivables from sale
of farms and machinery (Note 28).



|2.11. | Inventories
|----- | -----------

The inventories of agricultural products are measured at fair value less
costs to sell when they are ready to be harvested, when they are transferred from the group of biological assets to the group of inventories.

The inventories of seeds, manures, fertilizers, pesticides, fuel, lubricants, warehouse and sundry materials were assessed at the average
acquisition cost.





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





According to practices adopted by Management, upon identification of loss of quality of products which affect their sales (either due to
storage, load, transportation and other events related to the operation), these products are counted and physically segregated. At this moment, an internal process of registration, approval, disposal of inventories and allocation of these products
is started by means of approval of the responsible officers duly formalized in the Companys management system.

A provision for
impairment of inventories to realizable value of agricultural products is recognized when the fair value recorded in inventories exceeds net realizable value. Net realizable value is the estimated selling price in the ordinary course of business,
less estimated costs to sell. Adjustment to net realizable value is recognized in the statement of operations in the period to which it refers, under Impairment of net realizable value of agriculture product after harvest.



|2.12. | Biological assets
|----- | -----------------

The Company and its subsidiaries biological assets consist,
mainly, of the cultivation of soybean, corn, sorghum, cotton and sugarcane and are measured at fair value less cost to sell. These crops are not only cultivated to obtain non real estate operating profit, but also as an appreciation vector of the
real estate value of these rural properties.

The soybean, corn, sorghum and cotton crops are temporary cultures, in which the
agricultural product is harvested after a period of time ranging from 110 to 180 days after the planting date, depending on the crop, variety, geographic location and climate conditions.

The sugarcane crops productive cycle is five years, average, after their first cut, and, accordingly, they are classified as noncurrent
biological assets.

The fair value of biological assets is determined upon their initial recognition and at each subsequent reporting
date. Gains and losses that arise on measuring biological assets at fair value are determined by the difference between the fair value and cost to sell, and are recognized in the statement of operations for the period in which they arise, under
Changes in fair value of biological assets and agricultural products.

In certain circumstances, the fair value less cost to
sell approximate the cost of the crop until that moment, when only a little biological transformation has taken place since the costs were originally incurred, or the impact of biological transformation on price is not expected to be material.
Biological assets remain recorded at their fair value.

Methodology used



| |  |  | Sugar cane crops  The calculation method used to estimate the value of the biological asset sugarcane is the discounted cash flow at a rate compatible to the risk and term of operations. For such, we
projected the future cash flows in accordance with the projected productivity cycle for each harvest, taking into consideration the estimated useful life of each plantation, the prices of Total Sugar Recoverable, estimated productivities and the
related estimated costs of production, including the cost of land, harvest, loading and transportation for each planted hectare.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Crops of soybean, corn, sorghum, pearl millet and cotton  The calculation method used to estimate the value of the biological assets of grains/cotton is the discounted cash flow at a rate compatible to the risk
and term of operations. For such, we projected the future cash flows taking into consideration the estimated productivity, costs to be realized based on the company budget or based on new internal estimates and the market prices. The prices related
to commodities available in the future markets are obtained from the prices of the following trading stock exchanges: CBOT (Chicago Board of Trade), BM&F (Bolsa de Mercadorias e Futuros), NYBOT (New York Board of Trade).
For the agricultural products without this type of market, we used the prices obtained through direct market surveys or surveys disclosed by specialized companies. As for the market prices, we utilized its logistics and tax discounts in order to
find the prices of each of these products in each production unit of the Company.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





As mentioned above, the fair value of the biological assets presented in the balance sheet was determined using valuation techniques 
discounted cash flow method. The data for this method is based on the information available in the market, whenever possible, and when it is not feasible, a certain level of judgment is required to establish the fair value. The judgment includes
considerations on the data used, such as, price, productivity and production cost. Changes in the assumptions on these factors might affect the fair value presented in the biological assets.



|2.13. | Investment properties
|----- | ---------------------

The Companys business strategy aims mainly at the
acquisition, development, exploration and sale of rural properties with agricultural suitability. The Company acquires rural properties for which it expects significant potential to generate value by means of maintenance of the assets and
development of profitable agricultural activities. From the acquisition of our rural properties, the Company seeks to implement crops of high value added and transform these rural properties with investments in infrastructure and technology, in
addition to entering into lease contracts with third parties. Based on our strategy, when the Company considers that the rural properties have reached a profitable value, it sells these rural properties to realize capital gain.

The land of rural properties purchased by the Company is measured at acquisition cost, which does not exceed its net realizable value and is
presented in Non-current assets. The fair value of each property is measured in Note 13.

Buildings and improvements in
investment properties are measured at its historical cost less accumulated depreciation following the same criteria as described for Property, plant and equipment in Note 2.14.



|2.14. | Property, plant and equipment
|----- | -----------------------------

Property, plant and equipment are measured at historical
cost less accumulated depreciation. Historical cost includes expenditures that are directly attributable to the acquisition of the items. Historical cost also includes borrowing costs related to the acquisition of qualifying assets.

Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with item will flow to the Company and the cost of the item can be reliably measured. All other repair and maintenance costs recognized in profit and loss for the year, when incurred

Depreciation is calculated using the straight-line method to allocate their cost to their net carrying amount over their estimated useful
lives, whose annual depreciation rates are described below:



|                                    |  |                              |       |  |      |  |       |      |  |  |       | 
|----------------------------------- |  | ---------------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                    |  | Annual depreciation rates % |      
|                                    |  | 2014                         |       |  | 2013 |  |       | 2012 | 
|Buildings and improvements          |  |                              | 4-20  |  |      |  | 4-20  |      |  |  | 4-20  | 
|Equipment and facilities            |  |                              | 10    |  |      |  | 10    |      |  |  | 10-20 | 
|Vehicles and agricultural machinery |  |                              | 13-20 |  |      |  | 13-20 |      |  |  | 10-25 | 
|Furniture and fixture               |  |                              | 10    |  |      |  | 10    |      |  |  | 10    | 
|Opening of area                     |  |                              | 10-20 |  |      |  | 10-20 |      |  |  | 10-20 | 

The assets net book values and useful lives are reviewed, and adjusted if appropriate, at the end of
each year.

An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount
exceeds its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the selling price with the carrying
amount, and are recognized as Other revenue in the statement of operations.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|2.15. | Intangible assets
|----- | -----------------

Intangible assets comprise software license and acquired contractual
rights, and are amortized over their estimated useful lives, from 5 to 20 years.

Costs associated with maintaining computer software
programs are recognized as expenses, as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Company are recognized as intangible assets, these costs do
not exceed their recoverable value.



|2.16. | Trade accounts payables
|----- | -----------------------

Trade accounts payables are obligations to pay for goods or
services acquired from suppliers in the ordinary course of business. Trade accounts payables are classified as current liabilities if payment is due within one year. Otherwise, they are presented as noncurrent liabilities.



|2.17. | Loans and financing
|----- | -------------------

Loans and financing are recognized initially at fair value, net of
transaction costs incurred, and subsequently carried at amortized cost. Any difference between funds raised (net of transaction costs) and the settlement value is recognized in the statement of operations over the loans and financing agreement
period using the effective interest rate method.

Fees paid in raising credit facilities are recognized as transaction costs to the extent
that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee
is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.

Loans and
financing are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.



|2.18. | Provisions
|----- | ----------

Provisions are recognized when the Group has a present legal or constructive
obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated.

The contingent liabilities arising from labor, social security, tax, environmental, contractual and operating obligations, and administrative
and judicial claims are recognized at their estimated amount when the likelihood of loss is considered probable.



|2.19. | Current and deferred income and social contribution taxes
|----- | ---------------------------------------------------------



| | (a) | Current income and social contribution taxes
| | --- | --------------------------------------------

Current tax is the expected tax payable or
receivable/recoverable on taxable profit or loss for the year. To calculate current income and social contribution taxes, the Company adopts the Transitional Tax Regime (RTT), which allows the elimination of effects arising from changes in the tax
bases of these taxes introduced by Laws No. 11638/2007 and No. 11941/2009.

Current and deferred income and social contribution
taxes are calculated based on the rates of 15%, plus surtax of 10% on taxable profit exceeding R$240 per annum for income tax, and 9% on taxable profit for social contribution tax on net profit, and considers the offset of income and social
contribution tax losses limited to 30% of annual taxable profit, except for the rural activity which may reach 100% of annual taxable profit. There is no prescription period for the income and social contribution tax loss balance. As permitted by
tax legislation, certain subsidiaries opted for the regime in which profit is computed as a percentage of their revenues. For these companies, the estimated income and social contribution tax bases are calculated at the rate of 8% and 12% on gross
revenue, respectively, on which the statutory rates of the related tax and contribution are applied.





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | (b) | Deferred income tax and social contribution taxes
| | --- | -------------------------------------------------

Deferred income tax is recognized by
the estimated future effect of temporary differences and income and social contribution tax losses. A deferred income tax liability is recognized for all the temporary tax differences, whereas the deferred income tax assets are recognized only to
the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred tax assets and liabilities are classified as non-current. The income tax related to items directly
recognized in equity for the current or previous year are directly recognized in the same account.

Deferred income and social
contribution taxes are calculated on income and social contribution tax losses and the related temporary differences between the calculation basis of income and social contribution tax assets and liabilities and the carrying amount of the financial
statements. The rates of these taxes, currently defined for the determination of these deferred tax credits are 25% for income tax and 9% for social contribution tax (Notes 22 and 29).



|2.20. | Employee benefits
|----- | -----------------



| | a) | Share-based payments
| | -- | --------------------

The Company operates a number of equity-settled, share-based
payment plans, under which the entity receives services from employees as consideration for equity instruments (options) of the Company. The fair value of the employee services received in exchange for the grant of the options is recognized as an
expense. The total amount to be expensed is determined by reference to the fair value of the options granted, excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and the
remaining of an entity employee over a specified time period). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognized over the vesting period, which is the
period over which all of the specified vesting conditions are to be met.

At the balance sheet date, the entity reviews its estimates of
the number of options that are expected to vest based on the non-market vesting conditions. It recognizes the impact of original estimates reviewed, if any, in the statement of operations, with a corresponding adjustment to equity. Amounts received
net of any directly attributable transaction costs are credited to capital (nominal value) and share premium, if applicable, when options are exercised.



| | b) | Profit sharing
| | -- | --------------

The Company provides employees with a profit-sharing program, under
which all of the employees have the right to receive annual bonuses based on the Companys consolidated financial and operational results, and also on personal goals set for individual employees. Profit sharing is usually recognized at year
end, when the amount can be reliably measured by the Company.



|2.21. | Capital
|----- | -------

Common shares are classified in equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction of the amount raised, net of
taxes.



|2.22. | Non-controlling interests
|----- | -------------------------

Non-controlling interests are shown as a component of equity
in the balance sheet and the share of profit attributable to non-controlling interest is shown as a component of profit or loss, for the year in the consolidated statement of operations at June 30, 2012. At June 30, 2013 and June 30,
2014 there was no non-controlling shareholders interest.

For purchases from non-controlling interests, the difference between any
consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|2.23. | Revenue recognition
|----- | -------------------

Revenue comprises the fair value of the consideration received or
receivable for the sale of goods in the ordinary course of the Groups activities, or further, leases. Revenue is presented net of taxes and after eliminating sales within the Group have been accounted for.

The Group recognizes revenue when the amount of revenue can be reliably measured, is probable that future economic benefits will flow to the
entity and when specific criteria have been met for each of the Groups activities as described below. The Group performs its estimations based on historical results, taking into consideration the type of customer, the type of transaction and
the specifics of each sale.



| | (a) | Sale of goods
| | --- | -------------

Revenue from grain and sugarcane sales is recognized when the
significant risks and benefits of ownership of the goods are transferred to the purchaser, usually, when the products are delivered to the purchaser at the determined location, according to the agreed sales terms.

In the case of grains, the Group normally performs forward contracts where the price is set up by the Group for the total or partial volume of
grains sold at the delivery date, based on the calculations agreed on the selling contracts. Certain selling contracts are established in US dollars where the amount in reais is also established based on the forex rate according to the sale terms.
The price can also be adjusted by other factors, such as humidity and other technical characteristics of grains. Upon the grains delivery, the revenue is recognized based on the price established with each purchaser considering the forex rate on the
delivery date. After the grains are delivered to the addressee, the quality and final weight are evaluated, thus determining the final price of the transaction, and adjusting the contractual amounts in accordance with such factors as well as by the
forex rate variation up to the settlement date.



| | (b) | Sale of farms
| | --- | -------------

Sales of farms are not recognized as revenue until (i) the sale is
completed, (ii) the Group has determined that it is probable the buyer will pay, (iii) the amount of revenue can be measured reliably, and (iv) the Group has transferred all risks and rewards to the buyer, and does not have a
continuing involvement. The result from sales of farms is presented in the statement of operations as Gain for sale of farm at net value of the related cost.



| | (c) | Revenue from lease of land
| | --- | --------------------------

The leasing revenues of land are recognized on the straight line
basis over the leasing period. When the lease price is defined in quantities of agricultural products or livestock, the lease amount is recognized based on the price of the agricultural product or livestock effective at the balance sheet date or at
the date established in contract. The amounts received in advance as leasing, when applicable, are recognized in non-current liabilities under the caption Other liabilities.

Leasing revenues in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases.



|2.24. | Financial income and expenses
|----- | -----------------------------

Financial income and expenses represent interest,
monetary and exchange variations arising from loans and financing, financial investments, trade receivables, monetary and exchange variations on assets and liabilities, derivative financial instruments and discounts obtained from suppliers for the
prepayment of trade payables invoices.



|2.25. | Leases
|----- | ------

The Group classifies lease of farms as operating leases to the extent that a
significant portion of the risks and benefits of the ownership is held by the lessor. The lease expenses are initially recorded as part of biological assets and recorded as cost of sales of agricultural products upon the sale. The lease payments are
valued based on a future quotation of soybean and as such, do not have a fixed value.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|2.26. | Dividends payable and interest on equity
|----- | ----------------------------------------

Distributions of dividends and interest on
capital to the Groups stockholders are recognized as a liability in the Groups financial statements at year-end based on the Groups articles of associations. Any amount that exceeds the minimum legally required is only approved at
the shareholders general meeting according to the proposal submitted by the Board of Directors. The tax benefit of interest on equity is recognized in the statement of operations.



|2.27. | Adjustment to present value  of assets and liabilities
|----- | -------------------------------------------------------

Assets and liabilities
arising from long term or short term operations with material effect, are adjusted to present value.

Accordingly, certain elements of
assets and liabilities are adjusted to present value, based on discount rates, which aim to reflect the best estimates, as regards to the value of money in time.

The discount rate used varies depending on the features of the assets and liabilities and subject to the risk, term, and the specific item
under review. Its basis and assumption is the average rate of loans and financing obtained by the Group , net of inflationary effect.



|2.28. | Basic and diluted earnings (loss) per share
|----- | -------------------------------------------

The basic earnings/(loss) per share is
calculated by dividing the available profit (loss) (allocated) to common shareholders by the average weighted number of outstanding common shares during the year.

The diluted earnings per share is similarly computed, except that the outstanding shares are added, to include the number of additional shares
that would be outstanding if the shares with potential dilution attributable to stock options and warrants had been issued during the related years, using the weighted average price of the shares.



|2.29. | Statement of comprehensive income
|----- | ---------------------------------

The Company presents a statement of comprehensive
income in its financial statements which includes profit (loss) for the year and the effect of the currency translation adjustment of its foreign joint venture.



|2.30. | Statement of cash flow
|----- | ----------------------

The statements of cash flows are prepared and presented in
accordance with IAS 7.

Certain debt agreements require that the Group Company holds marketable securities as guarantee for the
outstanding balances. Such investments are linked while held in guarantee. The Group records the purchases and sales of such investments as investment activities in the statement of cash flows.



|3. | Critical Accounting Estimates and Judgments
|-- | -------------------------------------------

Accounting estimates and judgments are
continuously assessed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances.

Based on assumptions, the Company makes estimates concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual amounts. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next year are addressed below.



| | a) | Net carrying amount and useful life of property, plant and equipment
| | -- | --------------------------------------------------------------------

The value and
useful life of assets are assessed by specialists and adjusted at year end when necessary at the end of each reporting period.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The carrying amount of the asset is immediately reduced to its recoverable amount if the carrying amount is estimated to exceed the recoverable
amount.



| | b) | Contingencies
| | -- | -------------

The Company is party to different legal and administrative proceedings,
as described in Note 31. Provisions are set up for all the contingencies related to legal claims that are estimated to represent probable losses (present obligations resulting from past events in which an outflow of resources is probable, and
amounts can be reliably estimated). The evaluation of the likelihood of loss includes the opinion of outside legal advisors. Management believes that these contingencies are properly recorded and presented in the financial statements. (Note 31).



| | c) | Subscription warrants
| | -- | ---------------------

As described in Note 23(b), the Company issued subscription
warrants to its founder shareholders in March 2006, before the initial public offering. In the prospect of the initial public offering, the Company disclosed that the issue of subscription warrants to its founder shareholders was a recognition of
their work for the Companys foundation, for the entrepreneur spirit, for having prepared the Company for the initial public offering, and for having prepared the business plan, assuring their commitment to the Companys development. The
subscription warrants were attributed to the founder shareholders on a free basis.

The Company concluded that the subscription warrants
should be recorded in the scope of IFRS 2/, as instrument of shareholding interest issued in exchange for services rendered by parties other than the employees. Considering that, before the transition date to IFRS (July 1, 2009), all subscription
warrants of first issue could already be exercised and the Company had not disclosed the fair value at the evaluation date, the requirements for the transition to IFRS resulted in the fact that IFRS recognition and evaluation standards were not
applied to the subscription warrants, and the accounting by the former GAAP was maintained. Pursuant to the former GAAP, the subscription warrants are not recorded, resulting in their non-recording the subscription warrants in these financial
statements.



| | d) | Biological assets
| | -- | -----------------

The fair value of biological assets recorded in the balance sheet
(Note 11) was determined using valuation techniques, including the discounted cash flow method. The input for these estimates are based on those observable in the market, whenever possible, and when such inputs are not available, a certain level of
judgment is required to estimate the fair value. Judgment is required in order to estimate inputs such as, for example, price, productivity, and production cost. Changes in the assumptions used to determine those inputs may affect the fair value
recognized for biological assets.

A 1% increase or decrease in the expected productivity of sugarcane and grains would result in an
increase or decrease in the value of the biological asset by R$1,261, and an increase or decrease by 1% in the price of sugarcane and grains would result in an increase or decrease in the value of the biological asset by R$1,408.



| | e) | Investment properties
| | -- | ---------------------

The fair value of the investment properties disclosed in the
notes to the financial statements was obtained through appraisal reports of the farms prepared by external appraisal.

The appraisal was
carried out by means of standards adopted in the market considering characterization, location, type of soil, climate of the region, calculation of the improvements, presentation of the elements and calculation of the land value, which may vary in
relation to these variables.

Methodology used

At June 30, 2014, the following assumptions were used for the evaluation of farms:



| | i) | The evaluation used as basis, among other, the following information: (i) location of farms, (ii) total area and its related percentage of opening and use;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | ii) | The Market value presented for the farm corresponds to the portion of bare land and of construction and improvements, for payment in cash, not including machinery, equipment, agricultural inputs, crops. The soil
adjustment factor (preparation of land for planting) was considered in the assessment of prices;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii) | The price of soybean sack is the reference for the amount of land addressed to agriculture, in the surveyed region. The unit amounts of the farms for sale (Market researches) were obtained in soybean sacks per hectare.
Accordingly, the amount in reais (R$) of the property varies directly in relation to the variation in the soybean price; and
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv) | The soybean price considered at the base-date of the engagement, April 15, 2014, was R$ 55.00 for the regions of Barreiras, State of Bahia, and Baixa Grande do Ribeiro, State of Piauí, and R$ 55.50 for the
regions of Alto Taquari and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Mineiros, States of Goiás and Mato Grosso, respectively. This amount represents an
average in amounts arbitrated by the real estate Market of the region due to the great instability in the amount of soybean sack.



| | f) | Deferred income tax
| | -- | -------------------

The Company recognizes deferred assets and liabilities, as
described in Note 22, based on the differences between the carrying amount presented in the financial statements and the tax base of assets and liabilities using the effective rates. The Company regularly reviews the deferred tax assets for the
possibility of recovery, considering the generated historical profit and the projected future taxable profit, in accordance with a study of technical feasibility.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|4. | Pronouncements (new or revised) and interpretations applicable to the year ended June 30, 2014 and applicable to years starting on or after January 1, 2014 and subsequent years.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company first applied certain standards and amendments which had no impact on the financial statements of the Company, namely: IFRS 13 Fair
Value Measurement; changes in IAS 01 Presentation of Financial Statements; IFRS 10 Consolidated Financial Statements and Business IFRS11 together. Furthermore, the application of IFRS 12 Disclosure of interests in other entities resulted in
additional disclosures in the financial statements.

New accounting standards, interpretations of and amendments to existing IFRS
standards which are already effective at January 1,2014 have not been early adopted by the Company, since its reporting period is June 30 , 2014 and, accordingly, they will be adopted as from July 1, 2014. There are also standards and
IFRS amendments to standards which are not effective and have not been early adopted by the Company.



|                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Standard                                                              |  | Main requirements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|IFRS 9 Financial Instruments                                          |  | IFRS 9, as issued, reflects the first phase of IASB work to replace IAS 39 and is applicable to the classification and evaluation of financial assets and liabilities according to IAS 39 definition. The pronouncement would be
initially applicable as from the years starting on or after January 1, 2013, but the pronouncement Amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, postponed its effectiveness to January 1,
2015. In the subsequent phases, IASB shall approach issues as recording of hedges and provision for losses of financial assets. The adoption of the first phase of IFRS 9 shall impact on the classification and evaluation of the Companys
financial assets, but shall not impact on the classification and evaluation of its financial liabilities. The Company shall quantify the effects together with the effects of the other phases of IASB Project, as soon as the final consolidated
standard is issued.
|Investment Entities (Amendment to IFRS 10, IFRS 12 and IAS 27)        |  | The reviews shall be effective for the years starting on or after January 1, 2014 and provide an exception for the consolidation requirements for entities complying with the definition of investment entities according to IFRS 10.
This exception requires that the investment entities record the investments in subsidiaries at their fair values in P&L. The Company does not expect that these amendments will be material for its financial statements, since none of its entities
is qualified as investment entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|IAS 32 Offsetting Financial Assets and Liabilities  Review of IAS 32 |  | These reviews clarify the meaning of currently has a legal enforceable right to set off the recognized amounts and the criterion for the mechanisms of non-simultaneous settlement of clearance houses to be qualified
for offsetting. These amendments shall be effective for the years starting on or after January 1, 2014. The Company does not expect that these amendments will be material for its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|IFRIC 21 levies                                                       |  | IFRIC 21 clarifies that an entity should recognize a liability for a tax when the triggering event occurs. For a tax requiring its payment arising from the achievement of any metrics, the interpretation indicates that no
liability should be recognized until the metric is achieved. IFRIC 21 is effective for the years ended on or after January 1, 2014. The Company does not expect any material impact from IFRIC 21 on its financial
statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|IAS 39 Renewal of Derivatives and Continuation of Hedge Accounting  Review of Amendments to IAS 39 |  | This amendment softens the discontinuation of hedge accounting when the novation of a hedge-designated derivative meets certain criteria. These amendments are effective for the years starting on or after January 1, 2014. The
Company does not expect that this amendment will be material to its financial statements.                                                                                                                                                                                                                                
|IAS 36  Impairment of Assets                                                                       |  | In May 2013, IASB issued an amendment to IAS 36. The amendment to this standard requires the disclosure of discount rates used in the
current and previous evaluation of the recoverable amount of assets, if the recoverable amount of the impaired asset is based on an valuation technique at present value based on the fair value less the disposal cost.
This standard is effective for annual periods starting on or after January 1, 2014. The Company is evaluating the impact from the adoption of these amendments
on its Financial Statements.
|IAS 19  Employee contributions to defined benefit plans                                            |  | In November 2013, IASB issued an amendment to standard IAS 19. The amendment to this standard aims to establish aspects related to the recognition of employees or third parties contributions and their impacts on the
cost of service and periods of service. This standard is effective for annual periods starting on or after July 1, 2014. The Company is evaluating the impact from the adoption of these amendments on its Financial Statements.                                                                                                

The Company intends to adopt such standards when they are applicable to the Company from July 1, 2014.

There are no new standards or interpretations issued and not yet adopted which may, in Managements opinion, significantly impact
the result or equity disclosed by the Company.



|5. | Financial risk management
|-- | -------------------------



|5.1 | Financial risk factors
|--- | ----------------------

The Company operates with various financial instruments,
including cash and cash equivalents, short-term investments, trade accounts receivables, accounts receivable for the sale of farms, trade accounts payable, accounts payable for the purchase of farms, loans and financing and derivative instruments.

Certain Companys operations expose it to market risks, mainly in relation to exchange rates, interest rates and changes in the
prices of agricultural commodities. As a result, the Company also enters into derivative financial instruments, used to hedge it against exposures with respect to crops or with respect to assets and liabilities recognized in the balance sheet,
depending on the nature of the specific operation.

Considering the nature of the instruments, excluding derivative financial instruments,
fair value is basically determined by the application of the discounted cash flow method. The amounts recorded under current assets and liabilities are either highly liquid or mature within twelve months. Considering its terms and characteristics,
the book value approximates its fair value.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|5.2. | Policies approved by the Board of Directors for the use of financial instruments, including derivatives
|---- | -------------------------------------------------------------------------------------------------------

The Companys policies with respect to transactions with financial instruments, which have been approved by the Board of Directors, are as
follows: (i) Investment Policy which provides guidelines with respect to Companys investment of cash, considering the counterparty risk, the nature of instruments and liquidity, among others; (ii) Derivative financial instrument
policy which provides guidelines to manage the Companys exposures to currency risk, interest rate and index risks, and agricultural commodities price risk, always relating the derivative financial instrument to the asset or liability that
generates the exposure; and (iii) Risk Policy, which addresses items not covered by the Investment Policy or the Derivative financial instrument Policy including hedge against future cash flows with respect to future production of commodities.



| | a) | Cash and cash equivalents, marketable securities, trade accounts receivable, receivable from sale of farms, loans with related parties and trade accounts payable
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

The amounts recorded approximate their estimated fair value.



| | b) | Loans and financing
| | -- | -------------------

The carrying amount of loans and financing is denominated in reais and has
interest rates either fixed or based on the TJLP (Long Term Interest Rate). The carrying amount of loans and financing approximates its fair value. The Executive Board reports the operations entered into at the Board of Directors meetings.



|5.3. | Analysis of risk exposure of financial assets and liabilities
|---- | -------------------------------------------------------------



| | a) | Currency risk
| | -- | -------------

This risk arises from the possibility of the Company incurring in losses
due to fluctuations in exchange rates, which reduce the nominal amount of assets or increase the amount of liabilities. This risk also arises with respect to commitments to sell products existing in inventories or agricultural products not yet
harvested when sales are made at prices to be fixed at a future date, prices which vary depending on the exchange rate.



|                                     |  |                            |     |  |                                                         |  |         |                                                            |  |  |            |   |  |            |        |   |            |  |       |            |  |  |        |   |  |  |         |  
|------------------------------------ |  | -------------------------- | --- |  | ------------------------------------------------------- |  | ------- | ---------------------------------------------------------- |  |  | ---------- | - |  | ---------- | ------ | - | ---------- |  | ----- | ---------- |  |  | ------ | - |  |  | ------- | -
|                                     |  |                            |     |  | Non derivatives- Outstanding balance (Thousands of R$) |  |         | Volume/Derivatives (Note 7) Position  (Thousands of US$) | 
|Accounting caption                   |  | Index towhich it isexposed |     |  | 06/30/2014                                              |  |         | 06/30/2013                                                 |  |  | 06/30/2012 |   |  | 06/30/2014 |        |   | 06/30/2013 |  |       | 06/30/2012 | 
|Cash and cash equivalents            |  |                            | USD |  |                                                         |  | 13,861  |                                                            |  |  |           |   |  |            |       |   |            |  |      |            |  |  |       |   |  |  |        |  
|Accounts receivable Cresca (Note 33) |  |                            | USD |  |                                                         |  | 26,068  |                                                            |  |  |           |   |  |            |       |   |            |  |      |            |  |  |       |   |  |  |        |  
|Acquisitions payable                 |  |                            | USD |  |                                                         |  |        |                                                            |  |  | (2,163     | ) |  |            | (1,974 | ) |            |  |      |            |  |  |       |   |  |  |        |  
|Operations with derivatives          |  |                            | USD |  |                                                         |  |        |                                                            |  |  |           |   |  |            |       |   |            |  | 9,303 |            |  |  | (1,461 | ) |  |  | (31,833 | )
|Accounts payable Cresca (Note 33)    |  |                            | USD |  |                                                         |  | (33,019 | )                                                          |  |  |           |   |  |            |       |   |            |  |      |            |  |  |       |   |  |  |        |  
|                                     |  |                            |     |  |                                                         |  |         |                                                            |  |  |            |   |  |            |        |   |            |  |       |            |  |  |        |   |  |  |         |  
|Total                                |  |                            |     |  |                                                         |  | 6,910   |                                                            |  |  | (2,163     | ) |  |            | (1,974 | ) |            |  | 9,303 |            |  |  | (1,461 | ) |  |  | (31,833 | )
|                                     |  |                            |     |  |                                                         |  |         |                                                            |  |  |            |   |  |            |        |   |            |  |       |            |  |  |        |   |  |  |         |  



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | b) | Interest rate and index risk
| | -- | ----------------------------

This risk arises from the possibility of the Company
incurring in losses due to fluctuations in the interest rates or index which increase financial expenses related to certain contracts for the acquisition of land, pegged to IGP-M (FGV), an inflation index, variation.



|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|------------------------------ |  | ---------------------------------------------------- |  | ---------- | -------- | - | ---------- |  | ------- | ---------- |  |  | ------- | -
|                               |  | Non derivatives  Carrying Amount (Thousands of R$) | 
|Accounting caption             |  | Index to which itis exposed                          |  | 06/30/2014 |          |   | 06/30/2013 |  |         | 06/30/2012 | 
|Cash and cash equivalents      |  | CDI                                                  |  |            | 72,884   |   |            |  | 75,694  |            |  |  | 67,464  |  
|Marketable securities          |  | CDI                                                  |  |            | 21,532   |   |            |  | 9,244   |            |  |  | 23,197  |  
|Payables for purchase of farms |  | CDI                                                  |  |            | (26,060  | ) |            |  | (23,841 | )          |  |  | (22,296 | )
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|Total CDI                      |  |                                                      |  |            | 68,356   |   |            |  | 61,097  |            |  |  | 68,365  |  
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|Payables for purchase of farms |  | IGP-M                                                |  |            | (18,760  | ) |            |  | (17,646 | )          |  |  | (16,588 | )
|Total IGP-M                    |  |                                                      |  |            | (18,760  | ) |            |  | (17,646 | )          |  |  | (16,588 | )
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|Loans and financing            |  | TJLP/SELIC                                           |  |            | (19,435  | ) |            |  | (7,804  | )          |  |  | (27,038 | )
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|Total TJLP                     |  |                                                      |  |            | (19,435  | ) |            |  | (7,804  | )          |  |  | (27,038 | )
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|Loans and financing            |  | Fixed rates                                          |  |            | (100,727 | ) |            |  | (94,049 | )          |  |  | (67,323 | )
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  
|Total fixed rates              |  |                                                      |  |            | (100,727 | ) |            |  | (94,049 | )          |  |  | (67,323 | )
|                               |  |                                                      |  |            |          |   |            |  |         |            |  |  |         |  



| | c) | Agricultural commodities price risk
| | -- | -----------------------------------

This risk arises from the possibility of the
Company incurring in losses due to fluctuations in the market prices of agricultural products.



|                                  |  |                                                      |  |            |                                                           |  |            |  |        |            |  |  |            |  |  |            |          |   |            |  |        |   |  |  |        |  
|--------------------------------- |  | ---------------------------------------------------- |  | ---------- | --------------------------------------------------------- |  | ---------- |  | ------ | ---------- |  |  | ---------- |  |  | ---------- | -------- | - | ---------- |  | ------ | - |  |  | ------ | -
|                                  |  | Non derivatives  Carrying Amount (Thousands of R$) |  |            | Derivatives (Note 7)  Volume/Position (Thousands of R$) | 
|Accounting caption                |  | Index towhich it isexposed                           |  | 06/30/2014 |                                                           |  | 06/30/2013 |  |        | 06/30/2012 |  |  | 06/30/2014 |  |  | 06/30/2013 |          |   | 06/30/2012 | 
|Trade receivables                 |  | Soybean                                              |  |            | 30,045                                                    |  |            |  | 72,824 |            |  |  | 22,204     |  |  |            |         |   |            |  |       |   |  |  |       |  
|Financial instruments derivatives |  | Soybean                                              |  |            |                                                          |  |            |  |       |            |  |  |           |  |  |            | (181,428 | ) |            |  | (1,020 | ) |  |  | (1,247 | )
|Financial instruments derivatives |  | Corn                                                 |  |            |                                                          |  |            |  |       |            |  |  |           |  |  |            | 25       |   |            |  | (114   | ) |  |  | (406   | )
|Total                             |  |                                                      |  |            | 30,045                                                    |  |            |  | 72,824 |            |  |  | 22,204     |  |  |            | (181,403 | ) |            |  | (1,134 | ) |  |  | (1,653 | )



|5.4. | Objectives and strategies of risk management and of use of derivative instruments
|---- | ---------------------------------------------------------------------------------

Managing the financial risks is the responsibility of the Executive Board, which evaluates the exposure to the foreign currency risk, interest
rate and index risk and agricultural commodities price risk with respect to assets, liabilities and transactions of the Company. Considering the exposure to such risks, Company management evaluates the convenience, cost and availability in the
market of derivative financial instruments which allow minimization of the existing exposure to such risks. After such assessment, the Executive Board decides whether to enter into derivative financial instruments within the parameters previously
approved in the Policies referred to above, and reports it to the Board of Directors in its meetings.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|5.5. | Risks related to operating strategy
|---- | -----------------------------------

The use of derivative instruments as an economic
hedge minimizes the risks of changes in the cash flows arising from the currency risk, interest rate and index risk and agricultural commodities (currently soybean and corn) prices risks. However the change in the fair value of the derivative
financial instrument may differ from the change in the cash flows or fair value of the assets, liabilities or forecasted transactions which are being hedged, as a result of different factors such as, among others, differences between the contracting
dates, the maturity and settlement dates, or differences in spreads on the financial assets and liabilities being hedged and the corresponding spreads in the related legs of the swaps.

In the case of the strategy to hedge recognized assets and liabilities, management believes that the derivative financial instruments present
a high degree of protection with respect to the changes in the hedge assets and liabilities being hedged.

In the case of the strategy to
hedge forecasted sales of soybean or to hedge accounts payables/receivables that have its amount subject to changes based on commodities, there may be differences arising from additional factors such as differences between the estimated and actual
soybean volume to be harvested, or differences between the quoted price of soybean in the international markets where the derivative financial instruments are quoted and the price of soybean in the markets in which soybean is physically
delivered/received by the Company. Should the soybean volume effectively harvested be lower than the amount for which hedging instruments were contracted, the Company will be exposed to variations in the price of the commodities by the volume hedged
in excess and vice-versa should the soybean volume effectively harvested be higher than the hedged volume.

To the extent that the Company
does not fix the selling price of soybean through derivative financial instruments, but rather it establishes a range of selling prices through options, the quantity of US dollars to be received from the sale of soybean to customers and from the
settlement of the options is a range of amounts. Should the notional amount of futures to sell US dollars entered into is lower than the actual amount of US dollars received, the Company will be exposed to changes in the exchange rate between the US
dollar and the Brazilian real for the amount protected in excess and vice-versa should the notional amount of futures to sell US dollars entered into is higher than the actual amount of US dollars received.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Additionally, the Company is subject to credit risk with respect to the counterparty of the derivative financial instrument. The Company has
contracted derivative financial instruments either traded in on stock exchanges or from prime first-tier financial institutions or trading companies. The Company understands that, at the balance sheet date, there are no indications of
collectability risk with respect to the amounts recognized as assets with respect to derivative financial instruments.



|5.6. | Controls over the use of derivative financial instruments
|---- | ---------------------------------------------------------

The main controls established
on the use of derivative financial instruments are as follows:



| |  |  | establishment of policies defined by the Board of Directors;
| | - |  | ------------------------------------------------------------



| |  |  | prohibition to enter into derivative financial instruments that have not been approved by the Executive Officers;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | maintenance by the Executive Officers of a centralized inventory of outstanding derivative financial instruments contracts;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | daily risk report with the consolidated position provided to a group comprising the Executive Officers and designated members of the Board of Directors;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | monthly monitoring by the Executive Officers of the fair values as reported by the counterparties as compared to the amounts estimated by management; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the fair value of the derivative financial instruments is estimated based on the market in which they were contracted and also in which the instruments are inserted.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5.7 | Impact of derivative instruments on the statement of operation
|--- | --------------------------------------------------------------

The gains and losses for
changes in the fair value of derivative financial instruments are recognized in the statement of operations separately between realized statement of operation (corresponding to derivative financial instruments that have already been settled) and
unrealized profit and loss (corresponding to derivative financial instruments not yet settled).



|5.8. | Estimate of fair value of derivative financial instruments
|---- | ----------------------------------------------------------

The fair value of derivative
financial instruments traded in stock exchanges (BM&F BOVESPA and Chicago Board of Trade) is determined based on the quoted market price at the balance sheet date. To estimate the fair value of derivative financial instruments not traded in
stock exchanges the Company uses quotes for similar instruments or information available in the market and uses valuation methodologies widely used and that are also used by the counter parties. The estimates do not necessarily guarantee that such
operations may be settled at the estimated amounts. The use of different market information and/or valuation methodologies may have a material effect on the amount of the estimated fair value.

Derivative financial instruments entered into by our wholly-owned subsidiary FIM Guardian (foreign currency and index derivatives), are marked
to market by the investment fund, in accordance with its own rules applicable for investment funds, i.e., using market curves observed in the Futures and Commodities Exchange (BM&F BOVESPA), Cetip S.A, among others, and are examined by
independent auditors.

Specific methodologies used for derivative financial instruments entered into by the Company:



| |  |  | Derivative financial instruments of agricultural commodities  The fair value is obtained by using various market sources including quotes provided by international brokers, international banks and available on the
Chicago Board of Trade (CBOT).
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Derivative financial instruments of foreign currencies  The fair value is determined based on information obtained from various market sources including, as appropriate the BM&F BOVESPA, CETIP S.A., local
banks, in addition to information sent by the operation counterparty.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|(a) | Sensitivity analysis
|--- | --------------------

Management identified for each type of derivative financial
instrument the situation of variation in foreign exchange rates, interest rates or commodities prices which may generate loss on hedged assets and/or liabilities or, in the case of derivative financial instruments related to transactions not
recorded in the balance sheet, in the fair value of the contracted derivatives.

The sensitivity analysis aims at measuring the impact of
changes in market variables on the abovementioned financial instruments of the Company, considering all other market indicators as constant. Upon settlement, such amounts may differ from those stated below, due to the estimates used in their
preparation.

This analysis contemplates 5 distinct scenarios that differ among them due to the intensity of variation in relation to the
current market. At June 30, 2014, as reference for scenarios probable, I, II, III and IV a variation in relation to the current Market of 0%, -50%, -25%, +25%, +50% respectively, was considered.

The reference for the preparation of the probable scenario was the market prices of each one of the reference assets of derivative instruments
held by the Company at the closing of this year. Since all these assets are inserted in competitive and open markets, the current market price is a satisfactory reference for the expected price of these assets. Accordingly, since the current market
price was the reference for the calculation of both book value of derivatives and the probable scenario, the result of the latter one is equal to zero.

The assumptions and scenarios are as follows:



|                                            |  |                  |       |  |                          |  |      |                           |  |  |                   |  |  |                  |       |  |  |  |       | 
|------------------------------------------- |  | ---------------- | ----- |  | ------------------------ |  | ---- | ------------------------- |  |  | ----------------- |  |  | ---------------- | ----- |  |  |  | ----- | 
|                                            |  |                  |       |  |                          |  |      |                           |  |  |                   |  |  | 2014             |      
|                                            |  |                  |       |  | Devaluation in US dollar |  |      | Appreciation in US dollar | 
|                                            |  | Probablescenario |       |  | Scenario I 50%          |  |      | Scenario II 25%          |  |  | Scenario III+ 25% |  |  | Scenario IV+ 50% |      
|Foreign Exchange rateR$/US$                |  |                  | 2.20  |  |                          |  | 1.10 |                           |  |  | 1.65              |  |  |                  | 2.75  |  |  |  | 3.30  | 
|Soybean  US$ / bushel  May 2015 (CBOT)    |  |                  | 11.76 |  |                          |  | 5.88 |                           |  |  | 8.82              |  |  |                  | 14.70 |  |  |  | 17.64 | 
|Soybean  US$ / bushel  July 2015 (CBOT)   |  |                  | 11.81 |  |                          |  | 5.90 |                           |  |  | 8.86              |  |  |                  | 14.76 |  |  |  | 17.71 | 
|Corn  US$ / bag  September 2014 (BM&F)    |  |                  | 10.73 |  |                          |  | 5.36 |                           |  |  | 8.05              |  |  |                  | 13.41 |  |  |  | 16.09 | 
|Corn  US$ / bushel  September 2014 (CBOT) |  |                  | 4.19  |  |                          |  | 2.09 |                           |  |  | 3.14              |  |  |                  | 5.23  |  |  |  | 6.28  | 



|                                            |  |                  |       |  |                          |  |       |                           |  |  |                   |  |  |                  |       |  |  |  |       | 
|------------------------------------------- |  | ---------------- | ----- |  | ------------------------ |  | ----- | ------------------------- |  |  | ----------------- |  |  | ---------------- | ----- |  |  |  | ----- | 
|                                            |  |                  |       |  |                          |  |       |                           |  |  | 2013              | 
|                                            |  |                  |       |  | Devaluation in US dollar |  |       | Appreciation in US dollar | 
|                                            |  | Probablescenario |       |  | Scenario I 50%          |  |       | Scenario II 25%          |  |  | Scenario III+ 25% |  |  | Scenario IV+ 50% |      
|Foreign exchange rate  R$ / US$            |  |                  | 2.22  |  |                          |  | 1.11  |                           |  |  | 1.66              |  |  |                  | 2.77  |  |  |  | 3.32  | 
|Soybean  US$ / bushel  August 2013 (CBOT) |  |                  | 14.31 |  |                          |  | 7.16  |                           |  |  | 10.73             |  |  |                  | 17.89 |  |  |  | 21.47 | 
|Soybean  US$ / bushel  May 2014 (CBOT)    |  |                  | 12.55 |  |                          |  | 6.27  |                           |  |  | 9.41              |  |  |                  | 15.68 |  |  |  | 18.82 | 
|Soybean  R$ / bushel  July 2014 (CBOT)    |  |                  | 30.22 |  |                          |  | 15.11 |                           |  |  | 22.67             |  |  |                  | 37.78 |  |  |  | 45.33 | 
|Soybean  US$ / bushel  July 2014 (CBOT)   |  |                  | 12.59 |  |                          |  | 6.29  |                           |  |  | 9.44              |  |  |                  | 15.73 |  |  |  | 18.88 | 
|Corn  R$ / bushel  July 2014 (CBOT)       |  |                  | 25.71 |  |                          |  | 12.86 |                           |  |  | 19.29             |  |  |                  | 32.14 |  |  |  | 38.57 | 
|Corn  US$ / bushel  July 2014 (CBOT)      |  |                  | 5.36  |  |                          |  | 2.68  |                           |  |  | 4.02              |  |  |                  | 6.69  |  |  |  | 8.03  | 



|                                       |  |                  |       |  |                          |  |       |                           |  |  |                   |  |  |                  |       |  |  |  |       | 
|-------------------------------------- |  | ---------------- | ----- |  | ------------------------ |  | ----- | ------------------------- |  |  | ----------------- |  |  | ---------------- | ----- |  |  |  | ----- | 
|                                       |  |                  |       |  |                          |  |       |                           |  |  |                   |  |  | 2012             |      
|                                       |  |                  |       |  | Devaluation in US dollar |  |       | Appreciation in US dollar | 
|                                       |  | Probablescenario |       |  | Scenario I50%           |  |       | Scenario II 25%          |  |  | Scenario III+ 25% |  |  | Scenario IV+ 50% |      
|Foreign exchange rate  R$ / US$       |  |                  | 2.12  |  |                          |  | 1.06  |                           |  |  | 1.59              |  |  |                  | 2.65  |  |  |  | 3.18  | 
|Soybean  US$ / bushel  November 2012 |  |                  | 14.99 |  |                          |  | 7.50  |                           |  |  | 11.24             |  |  |                  | 18.74 |  |  |  | 22.48 | 
|Soybean  R$ / bushel  March 2013     |  |                  | 29.86 |  |                          |  | 14.93 |                           |  |  | 22.40             |  |  |                  | 37.33 |  |  |  | 44.79 | 
|Soybean  US$ / bushel  May 2013      |  |                  | 14.22 |  |                          |  | 7.11  |                           |  |  | 10.67             |  |  |                  | 17.78 |  |  |  | 21.33 | 
|Soybean  R$ / bushel  July 2013      |  |                  | 29.90 |  |                          |  | 14.95 |                           |  |  | 22.42             |  |  |                  | 37.38 |  |  |  | 44.85 | 
|Soybean  US$ / bushel  July 2013     |  |                  | 14.16 |  |                          |  | 7.08  |                           |  |  | 10.62             |  |  |                  | 17.70 |  |  |  | 21.24 | 
|Corn  R$ / bushel  July 2013         |  |                  | 14.45 |  |                          |  | 7.23  |                           |  |  | 10.84             |  |  |                  | 18.06 |  |  |  | 21.68 | 
|Corn  R$ / bushel  September 2012    |  |                  | 25.80 |  |                          |  | 12.90 |                           |  |  | 19.35             |  |  |                  | 32.25 |  |  |  | 38.70 | 
|Corn  US$ / bushel  September 2012   |  |                  | 6.60  |  |                          |  | 3.30  |                           |  |  | 4.95              |  |  |                  | 8.25  |  |  |  | 9.90  | 



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The table below presents, for each transaction, the effect on the change in the estimated fair value at June 30, 2014 of the derivative
financial instrument as well as the effect on increase or decrease of fair value of the related asset or liability. The effect on changes in fair value has been determined on an individual basis for each derivative financial instrument, asset or
liability for each transaction and for each scenario without considering combined or compensatory effects of the change in more than one variable or in the same variable in other derivative financial instruments, i.e., maintaining all the other
variables constant. Accordingly, each line of the table shall be individually considered without considering the effects presented in the other lines.

This sensitivity analysis aims to measure the impact of variable market changes on the aforementioned financial instruments of the Company,
considering all other market indicators included. Upon their settlement, such amounts may differ from the ones stated below, due to the estimates used in their preparation.



|           |  |      |         |  |                  |  |   |                      |  |  |                |   |  |                 |        |   |                |  |        |        |  |  |                  |   |          |  |       |   |  |                           |  |                 
|---------- |  | ---- | ------- |  | ---------------- |  | - | -------------------- |  |  | -------------- | - |  | --------------- | ------ | - | -------------- |  | ------ | ------ |  |  | ---------------- | - | -------- |  | ----- | - |  | ------------------------- |  | ----------------
|           |  | 2014
|Operation  |  | Risk |         |  |                  |  |   | Sensitivity analysis |  |  | Position      
|           |  |      |         |  | (a)              |  |   | Low                  |  |  | High           |   |  |                 |        |   |                |  |       
|           |  |      |         |  | Probablescenario |  |   | ScenarioI50%        |  |  | ScenarioII25% |   |  | ScenarioIII25% |        |   | ScenarioIV50% |  |        | Amount |  |  | Measurement unit |   | Maturity
|Derivative |  |      |         |  |                  |  |   |                      |  |  |                |   |  |                 |        |   |                |  |        |        |  |  |                  |   |          |  |       |   |  |                           |  |                 
|           |  |      | SOYBEAN |  |                  |  |  |                      |  |  | 5,190          |   |  |                 | 2,595  |   |                |  | (2,595 | )      |  |  | (5,190           | ) |          |  | (181  | ) |  | thousands bags of soybean |  | May/15 to Jul/15
|           |  |      | CORN    |  |                  |  |  |                      |  |  | 133            |   |  |                 | 69     |   |                |  | (59    | )      |  |  | (123             | ) |          |  | 0     |   |  | thousands bags of corn    |  | Sept/14         
|           |  |      | USD     |  |                  |  |  |                      |  |  | (17,444        | ) |  |                 | (8,839 | ) |                |  | 10,904 |        |  |  | 16,413           |   |          |  | 9,303 |   |  | US$000                   |  | Jul/14 to Jul/15
|           |  |      |         |  |                  |  |   |                      |  |  |                |   |  |                 |        |   |                |  |        |        |  |  |                  |   |          |  |       |   |  |                           |  |                 



|           |  |      |         |  |                  |  |   |                      |  |  |                |  |  |                 |        |   |                |  |         |        |  |  |                  |   |          |  |        |   |  |                          |  |                 
|---------- |  | ---- | ------- |  | ---------------- |  | - | -------------------- |  |  | -------------- |  |  | --------------- | ------ | - | -------------- |  | ------- | ------ |  |  | ---------------- | - | -------- |  | ------ | - |  | ------------------------ |  | ----------------
|           |  | 2013
|Operation  |  | Risk |         |  |                  |  |   | Sensitivity analysis |  |  | Position      
|           |  |      |         |  | (a)              |  |   | Low                  |  |  | High           |  |  |                 |        |   |                |  |        
|           |  |      |         |  | Probablescenario |  |   | ScenarioI50%        |  |  | ScenarioII25% |  |  | ScenarioIII25% |        |   | ScenarioIV50% |  |         | Amount |  |  | Measurement unit |   | Maturity
|Derivative |  |      |         |  |                  |  |   |                      |  |  |                |  |  |                 |        |   |                |  |         |        |  |  |                  |   |          |  |        |   |  |                          |  |                 
|           |  |      | SOYBEAN |  |                  |  |  |                      |  |  | 31,003         |  |  |                 | 15,551 |   |                |  | (15,386 | )      |  |  | (30,988          | ) |          |  | (1,021 | ) |  | thousand bags of soybean |  | aug/13 to jul/14
|           |  |      | CORN    |  |                  |  |  |                      |  |  | 1,602          |  |  |                 | 801    |   |                |  | (801    | )      |  |  | (1,602           | ) |          |  | (114   | ) |  | thousand bags of corn    |  | jul/14          
|           |  |      | USD     |  |                  |  |  |                      |  |  | 12             |  |  |                 | (1,179 | ) |                |  | 661     |        |  |  | 91               |   |          |  | (1,461 | ) |  | US$000                  |  | jul/13 to jul/14
|           |  |      |         |  |                  |  |   |                      |  |  |                |  |  |                 |        |   |                |  |         |        |  |  |                  |   |          |  |        |   |  |                          |  |                 



|                          |  |      |         |  |                  |  |        |                      |  |  |                |   |  |                 |         |   |                |  |        |        |  |  |                  |  |          |  |         |   |  |                          |  |                 
|------------------------- |  | ---- | ------- |  | ---------------- |  | ------ | -------------------- |  |  | -------------- | - |  | --------------- | ------- | - | -------------- |  | ------ | ------ |  |  | ---------------- |  | -------- |  | ------- | - |  | ------------------------ |  | ----------------
|                          |  | 2012
|Operation                 |  | Risk |         |  |                  |  |        | Sensitivity analysis |  |  |               
|                          |  |      |         |  |                  |  |        | Low                  |  |  | High           |   |  |                 |         |   |                |  |       
|                          |  |      |         |  | Probablescenario |  |        | ScenarioI50%        |  |  | ScenarioII25% |   |  | ScenarioIII25% |         |   | ScenarioIV50% |  |        | Amount |  |  | Measurement unit |  | Maturity
|Derivative                |  |      |         |  |                  |  |        |                      |  |  |                |   |  |                 |         |   |                |  |        |        |  |  |                  |  |          |  |         |   |  |                          |  |                 
|                          |  |      | SOYBEAN |  |                  |  | (3,866 | )                    |  |  | (44,465        | ) |  |                 | (24,166 | ) |                |  | 16,433 |        |  |  | 36,732           |  |          |  | (1,247  | ) |  | thousand bags of soybean |  | nov/12 to jul/13
|                          |  |      | CORN    |  |                  |  | (1,289 | )                    |  |  | (7,061         | ) |  |                 | (3,837  | ) |                |  | 2,609  |        |  |  | 5,832            |  |          |  | (407    | ) |  | thousand bags of corn    |  | ago/12 a jun/13 
|                          |  |      | USD     |  |                  |  | (3,269 | )                    |  |  | (37,600        | ) |  |                 | (20,434 | ) |                |  | 13,895 |        |  |  | 31,060           |  |          |  | (31,833 | ) |  | US$000                  |  | jul/12 to jul/13
|                          |  |      |         |  |                  |  |        |                      |  |  |                |   |  |                 |         |   |                |  |        |        |  |  |                  |  |          |  |         |   |  |                          |  |                 
|Debt for purchase of farm |  |      |         |  |                  |  | (101   | )                    |  |  | (1,165         | ) |  |                 | (633    | ) |                |  | 431    |        |  |  | 962              |  |          |  | (983    | ) |  |                          |  | dec/12          
|                          |  |      |         |  |                  |  |        |                      |  |  |                |   |  |                 |         |   |                |  |        |        |  |  |                  |  |          |  |         |   |  |                          |  |                 



| | (a) | As of June 30, 2014, the reference for the preparation of the probable scenario was the market prices of each one of the reference assets of derivative instruments held by the Company at the reporting period. Since
all these assets are inserted in competitive and open markets, the current Market price is a satisfactory reference for the estimated price of these assets. Accordingly, since the current market price was the reference for the calculation both of
the book value of derivatives and the probable scenario, the result of the latter one is equal to zero.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-32



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | a) | Sensitivity analysis
| | -- | --------------------

In addition, the Company presents a summary of possible scenarios
for the following 12 months of the Companys loans and receivables. Reliable sources of index disclosure were used for the rates used in the probable scenario.



|              |  |                              |  |                |  |                           |  |               |         |   |                      |  |        |                      |  |  |                     |   |  |                      |        |  |                     |  |         |   |  |  |       |  |  |  |         |   |  |  |       |  |  |  |        |   |  |  |        |  |  |  |         |   |  |  |        | 
|------------- |  | ---------------------------- |  | -------------- |  | ------------------------- |  | ------------- | ------- | - | -------------------- |  | ------ | -------------------- |  |  | ------------------- | - |  | -------------------- | ------ |  | ------------------- |  | ------- | - |  |  | ----- |  |  |  | ------- | - |  |  | ----- |  |  |  | ------ | - |  |  | ------ |  |  |  | ------- | - |  |  | ------ | 
|              |  |                              |  |                |  |                           |  | Current       |         |   | Scenario I Probable |  |        | Scenario I Possible |  |  | Scenario II Remote |   |  | Scenario I Possible |        |  | Scenario II Remote | 
|              |  | Risk                         |  | Classification |  | Details                   |  | June 30, 2014 |         |   |                      |  |        | Decrease 25%         |  |  | Decrease 50%        |   |  | Increase 25%         |        |  | Increase 50%        | 
|              |  | (Amounts in thousands of R$) | 
|              |  | CDI                          |  | CASH           |  | Investment CDI           |  |               | 123,482 |   |                      |  | 11.00% |                      |  |  | 299                 |   |  |                      | 11.25% |  |                     |  | (3,366  | ) |  |  | 8.44% |  |  |  | (6,731  | ) |  |  | 5.63% |  |  |  | 3,366  |   |  |  | 14.06% |  |  |  | 6,731   |   |  |  | 16.88% | 
|              |  | USD                          |  | CASH           |  | Investment USD           |  |               | 14,390  |   |                      |  | 2.25   |                      |  |  | 1,279               |   |  |                      | 2.40   |  |                     |  | (3,567  | ) |  |  | 1.65  |  |  |  | (7,133  | ) |  |  | 1.10  |  |  |  | 3,567  |   |  |  | 2.75   |  |  |  | 7,133   |   |  |  | 3.30   | 
|              |  | TJLP                         |  | Financing      |  | Financing inTJLP BNDES   |  |               | (16,404 | ) |                      |  | 5.00%  |                      |  |  |                    |   |  |                      | 5.00%  |  |                     |  | 52      |   |  |  | 3.75% |  |  |  | 104     |   |  |  | 2.50% |  |  |  | (52    | ) |  |  | 6.25%  |  |  |  | (104    | ) |  |  | 7.50%  | 
|              |  | NA                           |  | Financing      |  | Rural Credit              |  |               | (725    | ) |                      |  | 5.88%  |                      |  |  | N/A                 |   |  |                      | N/A    |  |                     |  | N/A     |   |  |  | N/A   |  |  |  | N/A     |   |  |  | N/A   |  |  |  | N/A    |   |  |  | N/A    |  |  |  | N/A     |   |  |  | N/A    | 
|              |  | NA                           |  | Financing      |  | LCA                       |  |               | (10,645 | ) |                      |  | 10.69% |                      |  |  | N/A                 |   |  |                      | N/A    |  |                     |  | N/A     |   |  |  | N/A   |  |  |  | N/A     |   |  |  | N/A   |  |  |  | N/A    |   |  |  | N/A    |  |  |  | N/A     |   |  |  | N/A    | 
|              |  | NA                           |  | Financing      |  | ConstitutionalFunds       |  |               | (86,487 | ) |                      |  | 7.23%  |                      |  |  | N/A                 |   |  |                      | N/A    |  |                     |  | N/A     |   |  |  | N/A   |  |  |  | N/A     |   |  |  | N/A   |  |  |  | N/A    |   |  |  | N/A    |  |  |  | N/A     |   |  |  | N/A    | 
|              |  | NA                           |  | Financing      |  | BNDES                     |  |               | (2,870  | ) |                      |  | 5.88%  |                      |  |  | N/A                 |   |  |                      | N/A    |  |                     |  | N/A     |   |  |  | N/A   |  |  |  | N/A     |   |  |  | N/A   |  |  |  | N/A    |   |  |  | N/A    |  |  |  | N/A     |   |  |  | N/A    | 
|CDI           |  | CDI                          |  | Financing      |  | FINEM BNDES              |  |               | (3,031  | ) |                      |  | 11.00% |                      |  |  | 8                   |   |  |                      | 11.25% |  |                     |  | 85      |   |  |  | 8.44% |  |  |  | 170     |   |  |  | 5.63% |  |  |  | (85    | ) |  |  | 14.06% |  |  |  | (170    | ) |  |  | 16.88% | 
|IGPM          |  | IGPM                         |  | Debt           |  | Farmpayable (R$)          |  |               | (26,060 | ) |                      |  | 5.44%  |                      |  |  |                    |   |  |                      | 5.44%  |  |                     |  | 354     |   |  |  | 4.08% |  |  |  | 709     |   |  |  | 2.72% |  |  |  | (354   | ) |  |  | 6.80%  |  |  |  | (709    | ) |  |  | 8.16%  | 
|CDI           |  | CDI                          |  | Debt           |  | Farmpayable (R$)          |  |               | (18,760 | ) |                      |  | 11.00% |                      |  |  |                    |   |  |                      | 11.00% |  |                     |  | 516     |   |  |  | 8.25% |  |  |  | 1,032   |   |  |  | 5.50% |  |  |  | (516   | ) |  |  | 13.75% |  |  |  | (1,032  | ) |  |  | 16.50% | 
|USD           |  | USD                          |  | Debt           |  | AcquisitionCRESCAS.A.     |  |               | (33.019 | ) |                      |  | 2.20   |                      |  |  | (2,861              | ) |  |                      | 2.40   |  |                     |  | 7,976   |   |  |  | 1.65  |  |  |  | 15,951  |   |  |  | 1.10  |  |  |  | (7,976 | ) |  |  | 2.75   |  |  |  | (15,951 | ) |  |  | 3.30   | 
|USD           |  | USD                          |  | Debt           |  | AcquisitionParaguayOption |  |               | (10,201 | ) |                      |  | 2.20   |                      |  |  | (915                | ) |  |                      | 2.40   |  |                     |  | 2,550   |   |  |  | 2.11  |  |  |  | 5,101   |   |  |  | 2.14  |  |  |  | (2,550 | ) |  |  | 2.35   |  |  |  | (5,101  | ) |  |  | 2.38   | 
|PRÉ           |  | N/A                          |  | Receivable     |  | ReceivablesforFarms (R$)  |  |               | 3,000   |   |                      |  | N/A    |                      |  |  | N/A                 |   |  |                      | N/A    |  |                     |  | N/A     |   |  |  | N/A   |  |  |  | N/A     |   |  |  | N/A   |  |  |  | N/A    |   |  |  | N/A    |  |  |  | N/A     |   |  |  | N/A    | 
|Soybean sacks |  | SOYBEAN                      |  | Receivable     |  | Receivablesfor Farms      |  |               | 735,000 |   |                      |  | 56.41  |                      |  |  |                    |   |  |                      | 56.41  |  |                     |  | (10,365 | ) |  |  | 42.31 |  |  |  | (20,731 | ) |  |  | 28.21 |  |  |  | 10,365 |   |  |  | 70.51  |  |  |  | 20,731  |   |  |  | 84.62  | 
|Soybean sacks |  | SOYBEAN                      |  | Receivable     |  | Receivablesfor Farms      |  |               | 185,000 |   |                      |  | 52.98  |                      |  |  |                    |   |  |                      | 52.98  |  |                     |  | (2,450  | ) |  |  | 39.74 |  |  |  | (4,901  | ) |  |  | 26.49 |  |  |  | 2,450  |   |  |  | 66.23  |  |  |  | 4,901   |   |  |  | 79.47  | 
|Soybean sacks |  | SOYBEAN                      |  | Receivable     |  | Receivablesfor Farms      |  |               | 143,325 |   |                      |  | 52.96  |                      |  |  |                    |   |  |                      | 52.96  |  |                     |  | (1,898  | ) |  |  | 39.72 |  |  |  | (3,795  | ) |  |  | 26.48 |  |  |  | 1,898  |   |  |  | 66.20  |  |  |  | 3,795   |   |  |  | 79.44  | 
|Soybean sacks |  | SOYBEAN                      |  | Receivable     |  | Receivablesfor Farms      |  |               | 396,652 |   |                      |  | 56.41  |                      |  |  |                    |   |  |                      | 56.41  |  |                     |  | (5,594  | ) |  |  | 42.31 |  |  |  | (11,188 | ) |  |  | 28.21 |  |  |  | 5,594  |   |  |  | 70.51  |  |  |  | 11,188  |   |  |  | 84.62  | 



F-33



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | b) | Credit risk
| | -- | -----------

Credit risk refers to the risk of noncompliance by a counterparty with its
contractual obligations, leading the Company to incur in financial losses. The risk to which the Company is exposed arises from the possibility of not recovering the amounts receivable for the sale of sugarcane, grains, and for the lease of land.

To reduce credit risk in the commercial transactions, the Company adopts the practice of defining credit limits and of constantly
monitoring the outstanding balances.

Currently, management does not expect losses due to the default of its counterparties and has no
significant exposure to any individual counterparty.



| | c) | Liquidity risk
| | -- | --------------

The prudent management of liquidity risk implies maintenance of
sufficient cash and short-term investments for the Company to meet its financial commitments, due to the mismatch of term or volume between the estimated receivables and payables.

Cash surplus is mainly invested in FIM Guardian investment fund, classified as a multi-market investment fund, managed by BTG Pactual S.A.
Bank. The fund has a clear investment policy, with limits to risk concentration.

The table below shows the Companys financial
liabilities by group of maturity based on the remaining period at the balance sheet date up to the contract maturity date. The amounts disclosed in the table are the undiscounted contractual cash flows and include interest, in addition to the net
derivative financial instruments, whose fair value is disclosed. With respect to payables for the purchase of farms all amounts due at June 30, 2014 and 2013 are payable upon the fulfillment of certain conditions precedent by the sellers and,
as a result, its payment date cannot be determined and have been considered as payable on demand in the table below; no interest or other financial charges have been considered.



|                                  |  |                   |        |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  |         | 
|--------------------------------- |  | ----------------- | ------ |  | -------------------- |  | ------ | ----------------------- |  |  | --------------- |  |  | ----- | ------ |  |  |  | ------- | 
|                                  |  | Less than oneyear |        |  | From one to twoyears |  |        | From three to fiveyears |  |  | Above fiveyears |  |  | Total |       
|Financial liabilities             |  |                   |        |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  |         | 
|At June 30, 2012                  |  |                   |        |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  |         | 
|Trade accounts payables           |  |                   | 4,151  |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  | 4,151   | 
|Financial Instruments derivatives |  |                   | 8,307  |  |                      |  | 10,209 |                         |  |  |                 |  |  |       |        |  |  |  | 18,516  | 
|Loans and financing               |  |                   | 45,456 |  |                      |  | 27,923 |                         |  |  | 22,376          |  |  |       | 13,297 |  |  |  | 109,052 | 
|Payables for purchase of farms    |  |                   | 40,858 |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  | 40,858  | 
|At June 30, 2013                  |  |                   |        |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  |         | 
|Trade accounts payables           |  |                   | 7,777  |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  | 7,777   | 
|Financial Instruments derivatives |  |                   | 2,860  |  |                      |  | 1,140  |                         |  |  |                 |  |  |       |        |  |  |  | 4,000   | 
|Loans and financing               |  |                   | 44,929 |  |                      |  | 16,282 |                         |  |  | 23,216          |  |  |       | 17,426 |  |  |  | 101,853 | 
|Payables for purchase of farms    |  |                   | 43,650 |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  | 43,650  | 
|At June 30, 2014                  |  |                   |        |  |                      |  |        |                         |  |  |                 |  |  |       |        |  |  |  |         | 
|Trade payables                    |  |                   | 8,158  |  |                      |  |       |                         |  |  |                |  |  |       |       |  |  |  | 8,158   | 
|Financial Instruments derivatives |  |                   | 204    |  |                      |  |       |                         |  |  |                |  |  |       |       |  |  |  | 204     | 
|Loans and financing               |  |                   | 62,253 |  |                      |  | 13,859 |                         |  |  | 29,539          |  |  |       | 14,511 |  |  |  | 120,162 | 
|Payables for purchase of farms    |  |                   | 44,820 |  |                      |  |       |                         |  |  |                |  |  |       |       |  |  |  | 44,820  | 
|Transactions with related parties |  |                   |       |  |                      |  | 33,237 |                         |  |  |                |  |  |       |       |  |  |  | 33,237  | 





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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|5.9. | Capital management
|---- | ------------------

The Companys objectives when managing capital are to safeguard
the Groups ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to stockholders, return capital to
stockholders or, also, issue new shares or sell assets to reduce, for example, debt.

Consistent with others in the industry, the Company
monitors capital based on the leverage ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total loans and financing (including current and noncurrent loans and financing as shown in the
consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as equity, as shown in the consolidated balance sheet, plus net debt.

According to the following table, the Company presents net debt of loans, acquisitions payable and trade accounts payables.



|                                     |  |      |          |   |      |  |          |      |  |  |         |  
|------------------------------------ |  | ---- | -------- | - | ---- |  | -------- | ---- |  |  | ------- | -
|                                     |  | 2014 |          |   | 2013 |  |          | 2012 | 
|Total loans                          |  |      | 120,162  |   |      |  | 101,853  |      |  |  | 94,361  |  
|Total payables for purchase of farms |  |      | 44,820   |   |      |  | 43,650   |      |  |  | 40,858  |  
|Total trade accounts payables        |  |      | 8,158    |   |      |  | 7,777    |      |  |  | 4,151   |  
|                                     |  |      |          |   |      |  |          |      |  |  |         |  
|                                     |  |      | 173,140  |   |      |  | 153,280  |      |  |  | 139,370 |  
|Less: cash and cash equivalents      |  |      | (86,745  | ) |      |  | (75,694  | )    |  |  | (67,464 | )
|Less: marketable securities          |  |      | (35,314  | ) |      |  | (27,232  | )    |  |  | (23,197 | )
|                                     |  |      |          |   |      |  |          |      |  |  |         |  
|                                     |  |      | (122,059 | ) |      |  | (102,926 | )    |  |  | (90,661 | )
|Net (debt)                           |  |      | (51,081  | ) |      |  | (50,354  | )    |  |  | (48,709 | )
|                                     |  |      |          |   |      |  |          |      |  |  |         |  
|Total equity                         |  |      | 583,906  |   |      |  | 586,985  |      |  |  | 558,968 |  
|                                     |  |      |          |   |      |  |          |      |  |  |         |  
|Total capital                        |  |      | 634,987  |   |      |  | 637,339  |      |  |  | 607,677 |  
|                                     |  |      |          |   |      |  |          |      |  |  |         |  
|                                     |  |      | (8%      | ) |      |  | (8%      | )    |  |  | (8%     | )



|5.10. | Hierarchy of fair value
|----- | -----------------------

The carrying amounts (less impairment) of trade accounts
receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities, for disclosure purposes, is estimated by discounting the future contractual cash flows at the current market interest rate that is
available for similar financial instruments.

The Group adopted IFRS 7 and IFRS 13 for financial instruments that are measured in the
balance sheet at fair value; this requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:



| |  |  | Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
| | - |  | ------------------------------------------------------------------------------------------------------------------------





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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | The | following table presents the Groups assets and liabilities that are measured at fair value at June 30 referred to level 2:
| | --- | ---------------------------------------------------------------------------------------------------------------------------



|                                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|--------------------------------- |  | ------- | ------- |  | ----- |  | ------- | ------- |  |  | ------- |  |  | ------- | ------- |  | ----- |  | ------- |  |  |  | ------- | 
|                                  |  | 2014    |         |  | 2013  |  |         | 2012    | 
|                                  |  | Level 2 |         |  | Total |  |         | Level 2 |  |  | Total   |  |  | Level 2 |         |  | Total | 
|Financial Assets                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Current asset                     |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Cash equivalents                  |  |         | 86,745  |  |       |  | 86,745  |         |  |  | 75,694  |  |  |         | 75,694  |  |       |  | 67,464  |  |  |  | 67,464  | 
|Marketable securities             |  |         | 21,532  |  |       |  | 21,532  |         |  |  | 9,244   |  |  |         | 9,244   |  |       |  |        |  |  |  |        | 
|Derivative financial instruments  |  |         | 18,255  |  |       |  | 18,255  |         |  |  | 17,081  |  |  |         | 17,081  |  |       |  | 4,327   |  |  |  | 4,327   | 
|Trade receivables                 |  |         | 30,865  |  |       |  | 30,865  |         |  |  | 131,102 |  |  |         | 131,102 |  |       |  | 60,655  |  |  |  | 60,655  | 
|Non-current                       |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Marketable securities             |  |         | 13,782  |  |       |  | 13,782  |         |  |  | 17,988  |  |  |         | 17,988  |  |       |  | 23,197  |  |  |  | 23,197  | 
|Derivative financial instruments  |  |         | 63      |  |       |  | 63      |         |  |  | 1,714   |  |  |         | 1,714   |  |       |  |        |  |  |  |        | 
|Trade accounts receivables        |  |         | 36,887  |  |       |  | 36,887  |         |  |  | 33,729  |  |  |         | 33,729  |  |       |  | 12,759  |  |  |  | 12,759  | 
|Transactions with related parties |  |         | 26,068  |  |       |  | 26,068  |         |  |  |        |  |  |         |        |  |       |  |        |  |  |  |        | 
|                                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Total                             |  |         | 234,197 |  |       |  | 234,197 |         |  |  | 286,552 |  |  |         | 286,552 |  |       |  | 168,402 |  |  |  | 168,402 | 
|                                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 



|                                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|--------------------------------- |  | ------- | ------- |  | ----- |  | ------- | ------- |  |  | ------- |  |  | ------- | ------- |  | ----- |  | ------- |  |  |  | ------- | 
|                                  |  | 2014    |         |  | 2013  |  |         | 2012    | 
|                                  |  | Level 2 |         |  | Total |  |         | Level 2 |  |  | Total   |  |  | Level 2 |         |  | Total | 
|Liabilities                       |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Current                           |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Trade account payables            |  |         | 8,158   |  |       |  | 8,158   |         |  |  | 7,777   |  |  |         | 7,777   |  |       |  | 4,151   |  |  |  | 4,151   | 
|Loans and financing               |  |         | 62,253  |  |       |  | 62,253  |         |  |  | 44,929  |  |  |         | 44,929  |  |       |  | 43,067  |  |  |  | 43,067  | 
|Derivative financial instruments  |  |         | 204     |  |       |  | 204     |         |  |  | 2,860   |  |  |         | 2,860   |  |       |  | 8,307   |  |  |  | 8,307   | 
|Payable for acquisitions          |  |         | 44,820  |  |       |  | 44,820  |         |  |  | 43,650  |  |  |         | 43,650  |  |       |  | 40,858  |  |  |  | 40,858  | 
|Non-current                       |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Loans and financing               |  |         | 57,909  |  |       |  | 57,909  |         |  |  | 56,924  |  |  |         | 56,924  |  |       |  | 51,294  |  |  |  | 51,294  | 
|Derivative financial instruments  |  |         |        |  |       |  |        |         |  |  | 1,140   |  |  |         | 1,140   |  |       |  | 10,209  |  |  |  | 10,209  | 
|Transactions with related parties |  |         | 33,019  |  |       |  | 33,019  |         |  |  |        |  |  |         |        |  |       |  |        |  |  |  |        | 
|                                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 
|Total                             |  |         | 206,363 |  |       |  | 206,363 |         |  |  | 157,280 |  |  |         | 157,280 |  |       |  | 157,886 |  |  |  | 157,886 | 
|                                  |  |         |         |  |       |  |         |         |  |  |         |  |  |         |         |  |       |  |         |  |  |  |         | 





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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|5.11. | Consolidated financial instruments by categories
|----- | ------------------------------------------------



|                                  |  |      |  |                      |         |  |                   |  |        |                                           |  |  |        |  |  |           |         |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |        |  |  |  |         |  |  |  |         | 
|--------------------------------- |  | ---- |  | -------------------- | ------- |  | ----------------- |  | ------ | ----------------------------------------- |  |  | ------ |  |  | --------- | ------- |  | -------------------- |  | ------- | ----------------- |  |  | ----------------------------------------- |  |  | ----- | ----- |  | --------- |  | ------ |  |  |  | ------- |  |  |  | ------- | 
|                                  |  |      |  | 2014                 |         |  | 2013              | 
|                                  |  | Note |  | Loans andreceivables |         |  | Availablefor sale |  |        | Designatedat fair valuethroughprofit/loss |  |  | Total  |  |  | Fairvalue |         |  | Loans andreceivables |  |         | Availablefor sale |  |  | Designatedat fair valuethroughprofit/loss |  |  | Total |       |  | Fairvalue | 
|Assets                            |  |      |  |                      |         |  |                   |  |        |                                           |  |  |        |  |  |           |         |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |        |  |  |  |         |  |  |  |         | 
|Current                           |  |      |  |                      |         |  |                   |  |        |                                           |  |  |        |  |  |           |         |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |        |  |  |  |         |  |  |  |         | 
|Cash equivalents                  |  |      |  |                      | 71,498  |  |                   |  |       |                                           |  |  |       |  |  |           | 71,498  |  |                      |  | 71,498  |                   |  |  | 62,954                                    |  |  |       |      |  |           |  |       |  |  |  | 62,954  |  |  |  | 62,954  | 
|Marketable securities             |  | 6.2  |  |                      |        |  |                   |  | 21,532 |                                           |  |  |       |  |  |           | 21,532  |  |                      |  | 21,532  |                   |  |  |                                          |  |  |       | 9,244 |  |           |  |       |  |  |  | 9,244   |  |  |  | 9,244   | 
|Trade accounts receivables        |  |      |  |                      | 34,145  |  |                   |  |       |                                           |  |  |       |  |  |           | 34,145  |  |                      |  | 34,145  |                   |  |  | 99,884                                    |  |  |       |      |  |           |  |       |  |  |  | 99,884  |  |  |  | 99,884  | 
|Receivable from sale of farm      |  | 8    |  |                      |        |  |                   |  |       |                                           |  |  | 30,865 |  |  |           | 30,865  |  |                      |  | 30,865  |                   |  |  |                                           |  |  |       |      |  |           |  | 31,218 |  |  |  | 31,218  |  |  |  | 31,218  | 
|Financial instruments derivatives |  | 7    |  |                      |        |  |                   |  |       |                                           |  |  | 18,255 |  |  |           | 18,255  |  |                      |  | 18,255  |                   |  |  |                                          |  |  |       |      |  |           |  | 17,081 |  |  |  | 17,081  |  |  |  | 17,081  | 
|Non-current                       |  |      |  |                      |         |  |                   |  |        |                                           |  |  |        |  |  |           |         |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |        |  |  |  |         |  |  |  |         | 
|Restricted marketable securities  |  | 12   |  |                      | 13,782  |  |                   |  |       |                                           |  |  |       |  |  |           | 13,782  |  |                      |  | 13,782  |                   |  |  | 17,988                                    |  |  |       |      |  |           |  |       |  |  |  | 17,988  |  |  |  | 17,988  | 
|Trade receivables                 |  | 8    |  |                      | 566     |  |                   |  |       |                                           |  |  |       |  |  |           | 566     |  |                      |  | 566     |                   |  |  | 830                                       |  |  |       |      |  |           |  |       |  |  |  | 830     |  |  |  | 830     | 
|Receivable from sale of farm      |  | 8    |  |                      |        |  |                   |  |       |                                           |  |  | 36,887 |  |  |           | 36,887  |  |                      |  | 36,887  |                   |  |  |                                           |  |  |       |      |  |           |  | 32,899 |  |  |  | 32,899  |  |  |  | 32,899  | 
|Transactions with derivatives     |  | 7    |  |                      | 63      |  |                   |  |       |                                           |  |  |       |  |  |           | 63      |  |                      |  | 63      |                   |  |  |                                          |  |  |       |      |  |           |  | 1,714  |  |  |  | 1,714   |  |  |  | 1,714   | 
|Transactions with related parties |  | 33   |  |                      | 26,068  |  |                   |  |       |                                           |  |  |       |  |  |           | 26,068  |  |                      |  | 26,068  |                   |  |  |                                          |  |  |       |      |  |           |  |       |  |  |  |        |  |  |  |        | 
|                                  |  |      |  |                      |         |  |                   |  |        |                                           |  |  |        |  |  |           |         |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |        |  |  |  |         |  |  |  |         | 
|Total                             |  |      |  |                      | 146,122 |  |                   |  | 21,532 |                                           |  |  | 85,997 |  |  |           | 253,661 |  |                      |  | 253,661 |                   |  |  | 181.656                                   |  |  |       | 9,244 |  |           |  | 82,912 |  |  |  | 273,812 |  |  |  | 273,812 | 
|                                  |  |      |  |                      |         |  |                   |  |        |                                           |  |  |        |  |  |           |         |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |        |  |  |  |         |  |  |  |         | 



|                                  |  |      |   |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |         |  |  |  |         | 
|--------------------------------- |  | ---- | - |  | -------------------- |  | ------- | ----------------- |  |  | ----------------------------------------- |  |  | ----- | ----- |  | --------- |  | ------- |  |  |  | ------- | 
|                                  |  |      |   |  | 2012                 | 
|                                  |  | Note |   |  | Loans andreceivables |  |         | Availablefor sale |  |  | Designatedat fair valuethroughprofit/loss |  |  | Total |       |  | Fairvalue | 
|Assets                            |  |      |   |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |         |  |  |  |         | 
|Current                           |  |      |   |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |         |  |  |  |         | 
|Cash equivalents                  |  |      |   |  |                      |  | 55,283  |                   |  |  |                                          |  |  |       |      |  |           |  | 55,283  |  |  |  | 55,283  | 
|Marketable securities             |  |      |   |  |                      |  |        |                   |  |  |                                          |  |  |       |      |  |           |  |        |  |  |  |        | 
|Trade accounts receivables        |  |      |   |  |                      |  | 51,210  |                   |  |  |                                          |  |  |       |      |  |           |  | 51,210  |  |  |  | 51,210  | 
|Receivable from sale of farm      |  |      | 8 |  |                      |  | 9,445   |                   |  |  |                                          |  |  |       |      |  |           |  | 9,445   |  |  |  | 9,445   | 
|Financial instruments derivatives |  |      | 7 |  |                      |  |        |                   |  |  |                                          |  |  |       | 4,327 |  |           |  | 4,327   |  |  |  | 4,327   | 
|Non-current                       |  |      |   |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |         |  |  |  |         | 
|Marketable securities             |  |      |   |  |                      |  | 23,197  |                   |  |  |                                          |  |  |       |      |  |           |  | 23,197  |  |  |  | 23,197  | 
|Receivable from sale of farm      |  |      | 8 |  |                      |  | 12,759  |                   |  |  |                                          |  |  |       |      |  |           |  | 12,759  |  |  |  | 12,759  | 
|Financial instruments derivatives |  |      |   |  |                      |  |        |                   |  |  |                                          |  |  |       |      |  |           |  |        |  |  |  |        | 
|                                  |  |      |   |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |         |  |  |  |         | 
|Total                             |  |      |   |  |                      |  | 151,894 |                   |  |  |                                          |  |  |       | 4,327 |  |           |  | 156,221 |  |  |  | 156,221 | 
|                                  |  |      |   |  |                      |  |         |                   |  |  |                                           |  |  |       |       |  |           |  |         |  |  |  |         | 





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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                                  |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 
|--------------------------------- |  | ---- | -- |  | ---------------------------------------- |  | --- | ----------------------------------- |  |  | ------- |  |  | --------- | ------- |  | ---------------------------------------- |  | ------- | ----------------------------------- |  |  | ----- |  |  | --------- | ------- |  |  |  | ------- |  |  |  | ------- | 
|                                  |  |      |    |  | 2014                                     |  |     | 2013                                | 
|                                  |  | Note |    |  | Designatedat fairvaluethroughprofit/loss |  |     | Financialliabilitiesatamortizedcost |  |  | Total   |  |  | Fairvalue |         |  | Designatedat fairvaluethroughprofit/loss |  |         | Financialliabilitiesatamortizedcost |  |  | Total |  |  | Fairvalue |        
|Liabilities                       |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 
|Current                           |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 
|Trade accounts payables           |  |      | 18 |  |                                          |  |    |                                     |  |  | 8,158   |  |  |           | 8,158   |  |                                          |  | 8,158   |                                     |  |  |      |  |  |           | 7,777   |  |  |  | 7,777   |  |  |  | 7,777   | 
|Loans and financing               |  |      | 19 |  |                                          |  |    |                                     |  |  | 62,253  |  |  |           | 62,253  |  |                                          |  | 62,253  |                                     |  |  |      |  |  |           | 44,929  |  |  |  | 44,929  |  |  |  | 44,929  | 
|Financial instruments derivatives |  |      | 7  |  |                                          |  | 204 |                                     |  |  |        |  |  |           | 204     |  |                                          |  | 204     |                                     |  |  | 2,860 |  |  |           |        |  |  |  | 2.860   |  |  |  | 2.860   | 
|Acquisitions payable              |  |      | 17 |  |                                          |  |    |                                     |  |  | 44,820  |  |  |           | 44,820  |  |                                          |  | 44,820  |                                     |  |  |      |  |  |           | 43,650  |  |  |  | 43,650  |  |  |  | 43,650  | 
|Non-current                       |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 
|Loans and financing               |  |      | 19 |  |                                          |  |    |                                     |  |  | 57,909  |  |  |           | 57,909  |  |                                          |  | 57,909  |                                     |  |  |      |  |  |           | 56,924  |  |  |  | 56,924  |  |  |  | 56,924  | 
|Financial instruments derivatives |  |      | 7  |  |                                          |  |    |                                     |  |  |        |  |  |           |        |  |                                          |  |        |                                     |  |  | 1,140 |  |  |           |        |  |  |  | 1,140   |  |  |  | 1,140   | 
|                                  |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 
|Transactions with related parties |  |      | 33 |  |                                          |  |    |                                     |  |  | 33,019  |  |  |           | 33,019  |  |                                          |  | 33,019  |                                     |  |  |      |  |  |           |        |  |  |  |        |  |  |  |        | 
|                                  |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 
|Total                             |  |      |    |  |                                          |  | 204 |                                     |  |  | 206,159 |  |  |           | 206,363 |  |                                          |  | 206,363 |                                     |  |  | 4,000 |  |  |           | 153,280 |  |  |  | 157.280 |  |  |  | 157.280 | 
|                                  |  |      |    |  |                                          |  |     |                                     |  |  |         |  |  |           |         |  |                                          |  |         |                                     |  |  |       |  |  |           |         |  |  |  |         |  |  |  |         | 



|                                  |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |         | 
|--------------------------------- |  | ---- | - |  | -------------------- |  | ----- | ---------------------------------------- |  |  | ----------- |  |  | ----------------------------------- | ------ |  | ----- |  | ------ | --------- |  |  | ------- |  |  |  | ------- | 
|                                  |  |      |   |  | 2012                 | 
|Consolidated  thousands R$       |  | Note |   |  | Loans andreceivables |  |       | Designatedat fairvaluethroughprofit/loss |  |  | Derivatives |  |  | Financialliabilitiesatamortizedcost |        |  | Total |  |        | Fairvalue | 
|Liabilities                       |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |         | 
|Current                           |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |         | 
|Trade payables                    |  |      |   |  |                      |  | 4,151 |                                          |  |  |            |  |  |                                     |       |  |       |  |       |           |  |  | 4,151   |  |  |  | 4,151   | 
|Loans and financing               |  |      |   |  |                      |  |      |                                          |  |  |            |  |  |                                     |       |  |       |  | 43,067 |           |  |  | 43,067  |  |  |  | 43,067  | 
|Financial instruments derivatives |  |      | 8 |  |                      |  |      |                                          |  |  |            |  |  |                                     | 8,307  |  |       |  |       |           |  |  | 8,307   |  |  |  | 8,307   | 
|Acquisitions payable              |  |      |   |  |                      |  |      |                                          |  |  | 40,858      |  |  |                                     |       |  |       |  |       |           |  |  | 40,858  |  |  |  | 40,858  | 
|                                  |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |        | 
|Non-current                       |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |        | 
|Loans and financing               |  |      |   |  |                      |  |      |                                          |  |  |            |  |  |                                     |       |  |       |  | 51,294 |           |  |  | 51,294  |  |  |  | 51,294  | 
|Financial instruments derivatives |  |      | 8 |  |                      |  |      |                                          |  |  |            |  |  |                                     | 10,209 |  |       |  |       |           |  |  | 10,209  |  |  |  | 10,209  | 
|                                  |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |         | 
|                                  |  |      |   |  |                      |  | 4,151 |                                          |  |  | 40,858      |  |  |                                     | 18,516 |  |       |  | 94,361 |           |  |  | 157,886 |  |  |  | 157,886 | 
|                                  |  |      |   |  |                      |  |       |                                          |  |  |             |  |  |                                     |        |  |       |  |        |           |  |  |         |  |  |  |         | 

The model and assumptions used in the determination of fair value represent managements best estimate
and are reviewed at each presentation of annual information and adjusted, where necessary.





F-38



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|6. | Cash and cash equivalents and marketable securities
|-- | ---------------------------------------------------



|6.1. | Cash and cash equivalents
|---- | -------------------------



|                                 |  |      |        |  |      |  |        |      |  |  |        | 
|-------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                 |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Cash and banks                   |  |      | 15,247 |  |      |  | 12,740 |      |  |  | 12,181 | 
|Repurchase agreements            |  |      | 66,267 |  |      |  | 51,894 |      |  |  | 20,135 | 
|Time deposits in Brazilian banks |  |      | 5,231  |  |      |  | 11,060 |      |  |  | 35,148 | 
|                                 |  |      |        |  |      |  |        |      |  |  |        | 
|                                 |  |      | 86,745 |  |      |  | 75,694 |      |  |  | 67,464 | 
|                                 |  |      |        |  |      |  |        |      |  |  |        | 

Time deposits and repurchase agreements held at June 30, 2014 and 2013 contractually require the banks to
redeem the amount originally invested plus accrued interest through the date of redemption without any penalty, at any time without prior notice. This provision effectively results in on-demand deposits, despite having a final maturity date.

Amounts invested bear interest based on a percentage of CDI (Interbank Deposit Certificate rate, an interest rate for interbank deposits
measured and disclosed daily by CETIP, an independent entity that provides depository, custodian and trading services) which ranged between 91% and 101.5% of the daily CDI as of June 30, 2014 and between 99% and 103% as of June 30, 2013.



|6.2. | Marketable securities
|---- | ---------------------



|                                     |  |      |        |  |      |  |       |      |  |  |   | 
|------------------------------------ |  | ---- | ------ |  | ---- |  | ----- | ---- |  |  | - | 
|                                     |  | 2014 |        |  | 2013 |  |       | 2012 | 
|Non-exclusive investment fund shares |  |      | 21,532 |  |      |  | 9,244 |      |  |  |  | 
|                                     |  |      |        |  |      |  |       |      |  |  |   | 
|                                     |  |      | 21,532 |  |      |  | 9,244 |      |  |  |  | 
|                                     |  |      |        |  |      |  |       |      |  |  |   | 



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|7. | Financial instruments derivatives
|-- | ---------------------------------



|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|------------ |  | ------------ |  | --------------------------------- |  | ------------ | ---------------------------- |  | ---------- |  | ------ | ------- |  |  | --------------- |  |  | --------------------------- | ------ |  | ---- |  | --------- |  |  | ----
|             |  |              |  |                                   |  |              |                              |  | R$        
|             |  |              |  |                                   |  |              |                              |  | 2014      
|Risk         |  | Maturity     |  | Outstanding derivativeinstruments |  | Counterparty |                              |  | Receivable |  |        | Payable |  |  | TotalNetbalance |  |  | Volume/positionAmount(000) |        |  | Unit
|Currency US$ |  | July-14      |  | BM&F                              |  |              | Banks                        |  |            |  | 495    |         |  |  |                |  |  |                             | 495    |  |      |  | 41,750    |  |  | US$ 
|Currency US$ |  | July-14      |  | NDF                               |  |              | Banks                        |  |            |  | 1,933  |         |  |  |                |  |  |                             | 1,933  |  |      |  | (16,319)  |  |  | US$ 
|Currency US$ |  | August-14    |  | NDF                               |  |              | Banks                        |  |            |  | 63     |         |  |  |                |  |  |                             | 63     |  |      |  | 5,000     |  |  | US$ 
|Currency US$ |  | March-15     |  | NDF                               |  |              | Banks                        |  |            |  | 435    |         |  |  |                |  |  |                             | 435    |  |      |  | (2,644)   |  |  | US$ 
|Currency US$ |  | July-15      |  | NDF                               |  |              | Banks                        |  |            |  | 63     |         |  |  |                |  |  |                             | 63     |  |      |  | (2,280)   |  |  | US$ 
|Currency US$ |  | July-14      |  | Options                           |  |              | Banks                        |  |            |  | 1,101  |         |  |  |                |  |  |                             | 1,101  |  |      |  | (16,204)  |  |  | US$ 
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                |  |  |                             |        |  |      |  |           |  |  | US$ 
|             |  |              |  | Current                           |  |              |                              |  |            |  | 4,027  |         |  |  |                |  |  |                             | 4,027  |  |      |  | 11,583    |  |  | US$ 
|             |  |              |  | Non-current                       |  |              |                              |  |            |  | 63     |         |  |  |                |  |  |                             | 63     |  |      |  | (2,280)   |  |  | US$ 
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|             |  |              |  | Total Risk with Currency US$      |  |              |                              |  |            |  | 4,090  |         |  |  |                |  |  |                             | 4,090  |  |      |  | 9,303     |  |  | US$ 
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|Commodities: |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|Soybean CBOT |  | April-15     |  | Derivatives  Soybean (Future)    |  |              | TradingCompanies/Banks/CBOT  |  |            |  | 340    |         |  |  |                |  |  |                             | 340    |  |      |  | (90,714)  |  |  | Bags
|Soybean CBOT |  | June-15      |  | Derivatives  Soybean (Future)    |  |              | TradingCompanies/Banks /CBOT |  |            |  | 446    |         |  |  |                |  |  |                             | 446    |  |      |  | (90,714)  |  |  | Bags
|Corn CBOT    |  | September-14 |  | Derivatives  Corn (Future)       |  |              | TradingCompanies/Banks /CBOT |  |            |  |       |         |  |  | (204)           |  |  |                             | (204)  |  |      |  | 166,684   |  |  | Bags
|Corn BM&F    |  | September-14 |  | Derivatives Corn BM&F             |  |              | BM&F                         |  |            |  | 22     |         |  |  |                |  |  |                             | 22     |  |      |  | (166,659) |  |  | Bags
|             |  |              |  | Current                           |  |              |                              |  |            |  | 808    |         |  |  | (204)           |  |  |                             | 604    |  |      |  | (181,403) |  |  | Bags
|             |  |              |  | Non-current                       |  |              |                              |  |            |  |       |         |  |  |                |  |  |                             |       |  |      |  |          |  |  | Bags
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|             |  |              |  | Total risk withcommodities        |  |              |                              |  |            |  | 808    |         |  |  | (204)           |  |  |                             | 604    |  |      |  | (181,403) |  |  | Bags
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|             |  |              |  |                                   |  |              | Total risks                  |  |            |  | 4,898  |         |  |  | (204)           |  |  |                             | 4,694  |  |      |  | N.A.      |  |  |     
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|             |  |              |  |                                   |  |              | Marginvalue                  |  |            |  | 13,420 |         |  |  |                |  |  |                             | 13,420 |  |      |  |           |  |  |     
|             |  |              |  |                                   |  |              |                              |  |            |  |        |         |  |  |                 |  |  |                             |        |  |      |  |           |  |  |     
|             |  |              |  |                                   |  |              | Current                      |  |            |  | 18.255 |         |  |  | (204)           |  |  |                             | 18,051 |  |      |  |          |  |  |     
|             |  |              |  |                                   |  |              | Non-current                  |  |            |  | 63     |         |  |  |                |  |  |                             |        |  |      |  |          |  |  |     
|             |  |              |  |                                   |  |              | Result fromDerivatives       |  |            |  | 2,835  |         |  |  | (8,418)         |  |  |                             |        |  |      |  |           |  |  |     



F-40



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|---------------------------- |  | --------- |  | -------------------------------- |  | ----------------------------- |  | ---------- | ------ |  | ------- |  | ------- | --------------- |  |  | --------------------------- | - |  | ---- | ------- | - |  | ----
|                             |  |           |  |                                  |  |                               |  | R$        
|                             |  |           |  |                                  |  |                               |  | 2013      
|Risk                         |  | Maturity  |  | Outstandingderivativeinstruments |  | Counterparty                  |  | Receivable |        |  | Payable |  |         | TotalNetbalance |  |  | Volume/positionAmount(000) |   |  | Unit
|Currency US$                 |  | July-13   |  | BM&F/NDF                         |  | Banks                         |  |            | 2,290  |  |         |  | (2,076  | )               |  |  | 214                         |   |  |      | 27,375  |   |  | US$ 
|Currency US$                 |  | March-14  |  | NDF                              |  | Banks                         |  |            |       |  |         |  | (784    | )               |  |  | (784                        | ) |  |      | (5,288  | ) |  | US$ 
|Currency US$                 |  | June-14   |  | NDF                              |  | Banks                         |  |            | 110    |  |         |  |        |                 |  |  | 110                         |   |  |      | 983     |   |  | US$ 
|Currency US$                 |  | July-14   |  | NDF                              |  | Banks                         |  |            |       |  |         |  | (508    | )               |  |  | (508                        | ) |  |      | (12,137 | ) |  | US$ 
|Currency US$                 |  | July-14   |  | Options                          |  | Banks                         |  |            |        |  |         |  | (632    | )               |  |  | (632                        | ) |  |      | (12,394 | ) |  |     
|Current                      |  |           |  |                                  |  |                               |  |            | 2,400  |  |         |  | (2,860  | )               |  |  | (460                        | ) |  |      | 23,070  |   |  | US$ 
|Non-current                  |  |           |  |                                  |  |                               |  |            |       |  |         |  | (1,140  | )               |  |  | (1,140                      | ) |  |      | (24,531 | ) |  | US$ 
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Total Risk with Currency US$ |  |           |  |                                  |  |                               |  |            | 2,400  |  |         |  | (4,000  | )               |  |  | (1,600                      | ) |  |      | (1,461  | ) |  | US$ 
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Commodities:                 |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Soybean CBOT                 |  | August-13 |  | Derivatives Soybean             |  | Trading Companies/Banks/CBOT  |  |            | 12     |  |         |  |        |                 |  |  | 12                          |   |  |      | (29     | ) |  | bags
|Soybean CBOT                 |  | May-14    |  | Derivatives Soybean             |  | Trading Companies/Banks /CBOT |  |            | 598    |  |         |  |        |                 |  |  | 598                         |   |  |      | (181    | ) |  | bags
|Soybean CBOT                 |  | July-14   |  | Derivatives Soybean             |  | Trading Companies/Banks /CBOT |  |            | 1,058  |  |         |  |        |                 |  |  | 1,058                       |   |  |      | (606    | ) |  | bags
|Corn CBOT                    |  | July-14   |  | DerivativesCorn                  |  | Trading Companies/Banks /CBOT |  |            | 254    |  |         |  |        |                 |  |  | 254                         |   |  |      | (114    | ) |  | bags
|Soybean CBOT                 |  | July-14   |  | Options                          |  | Trading Companies/Banks /CBOT |  |            | 402    |  |         |  |        |                 |  |  | 402                         |   |  |      | (204    | ) |  | bags
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  | bags
|Current                      |  |           |  |                                  |  |                               |  |            | 610    |  |         |  |        |                 |  |  | 610                         |   |  |      | (210    | ) |  | bags
|Non-current                  |  |           |  |                                  |  |                               |  |            | 1,714  |  |         |  |        |                 |  |  | 1,714                       |   |  |      | (924    | ) |  | bags
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Total risk withcommodities   |  |           |  |                                  |  |                               |  |            | 2,324  |  |         |  |        |                 |  |  | 2,324                       |   |  |      | (1,134  | ) |  | Bags
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Tot al risks                 |  |           |  |                                  |  |                               |  |            | 4,724  |  |         |  | (4,000  | )               |  |  | 724                         |   |  |      | N.A.    |   |  |     
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Margin value                 |  |           |  |                                  |  |                               |  |            | 14,071 |  |         |  |        |                 |  |  | 14,071                      |   |  |      |        |   |  |     
|                             |  |           |  |                                  |  |                               |  |            |        |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Current                      |  |           |  |                                  |  |                               |  |            | 17,081 |  |         |  | (2,860  | )               |  |  |                             |   |  |      |         |   |  |     
|Non-current                  |  |           |  |                                  |  |                               |  |            | 1,714  |  |         |  | (1,140  | )               |  |  |                             |   |  |      |         |   |  |     
|Result from Derivatives      |  |           |  |                                  |  |                               |  |            | 16,043 |  |         |  | (21,006 | )               |  |  |                             |   |  |      |         |   |  |     



F-41



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|---------------------------- |  | ----------- |  | -------- |  | -------------------------------- |  | ----------------------------- |  | ---------- | ----- |  | ------- |  | ------- | --------------- |  |  | --------------------------- | - |  | ---- | ------- | - |  | ----
|                             |  |             |  |          |  |                                  |  |                               |  | R$        
|                             |  |             |  |          |  |                                  |  |                               |  | 2012      
|Risk                         |  | Maturity    |  | Strategy |  | Outstandingderivativeinstruments |  | Counterparty                  |  | Receivable |       |  | Payable |  |         | TotalNetbalance |  |  | Volume/positionAmount(000) |   |  | Unit
|Currency US$                 |  | July-12     |  | (ii)     |  | NDF                              |  | Local banks                   |  |            |      |  |         |  | (6,928  | )               |  |  | (6,928                      | ) |  |      | (11,030 | ) |  | US$ 
|Currency US$                 |  | August-12   |  | (ii)     |  | NDF                              |  | Local banks                   |  |            | 173   |  |         |  | (31     | )               |  |  | 142                         |   |  |      | 2,592   |   |  | US$ 
|Currency US$                 |  | December-12 |  | (i)      |  | NDF                              |  | Local banks                   |  |            | 68    |  |         |  |        |                 |  |  | 68                          |   |  |      | 983     |   |  | US$ 
|Currency US$                 |  | April-13    |  | (ii)     |  | NDF                              |  | Local banks                   |  |            |      |  |         |  | (236    | )               |  |  | (236                        | ) |  |      | (2,183  | ) |  | US$ 
|Currency US$                 |  | July -13    |  | (ii)     |  | NDF                              |  | Local banks                   |  |            |      |  |         |  | (343    | )               |  |  | (343                        | ) |  |      | (9,945  | ) |  | US$ 
|Currency US$                 |  | July -12    |  | (ii)     |  | BMF                              |  | Local banks                   |  |            |      |  |         |  | (769    | )               |  |  | (769                        | ) |  |      | (12,250 | ) |  | US$ 
|Option                       |  | July -13    |  | (ii)     |  | Option                           |  | Local banks                   |  |            |      |  |         |  | (196    | )               |  |  | (196                        | ) |  |      |        |   |  | US$ 
|Currency US$                 |  | July -13    |  | (ii)     |  | Option ofUSD                     |  | InternationalTradingCompanies |  |            |      |  |         |  | (37     | )               |  |  | (37                         | ) |  |      |        |   |  | US$ 
|Current                      |  |             |  |          |  |                                  |  |                               |  |            | 241   |  |         |  | (8,307  | )               |  |  | (8,066                      | ) |  |      | (31,833 | ) |  |     
|Non-current                  |  |             |  |          |  |                                  |  |                               |  |            |      |  |         |  | (233    | )               |  |  | (233                        | ) |  |      |        |   |  |     
|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Total Risk with currency US$ |  |             |  |          |  |                                  |  |                               |  |            | 241   |  |         |  | (8,540  | )               |  |  | (8,299                      | ) |  |      | (31,833 | ) |  | US$ 
|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Commodities                  |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Soybean                      |  | July -13    |  | (ii)     |  | DerivativesSoybean (a)           |  | InternationalTradingCompanies |  |            |      |  |         |  | (7,660  | )               |  |  | (7,660                      | ) |  |      | (1,247  | ) |  | bags
|Corn                         |  | August-12   |  | (ii)     |  | NDF Corn                         |  | Local banks                   |  |            | 68    |  |         |  |        |                 |  |  | 68                          |   |  |      |        |   |  | bags
|Corn                         |  | July -13    |  | (ii)     |  | DerivativesCorn (a)              |  | InternationalTradingCompanies |  |            |      |  |         |  | (2,316  | )               |  |  | (2,316                      | ) |  |      | (406    | ) |  | bags
|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Current                      |  |             |  |          |  |                                  |  |                               |  |            | 68    |  |         |  |        |                 |  |  | 68                          |   |  |      | (1,653  | ) |  |     
|Non-current                  |  |             |  |          |  |                                  |  |                               |  |            |      |  |         |  | (9,976  | )               |  |  | (9,976                      | ) |  |      |         |   |  |     
|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Total risk withcommodities   |  |             |  |          |  |                                  |  |                               |  |            | 68    |  |         |  | (9,976  | )               |  |  | (9,908                      | ) |  |      | (1,653  | ) |  | bags
|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|Total Risk                   |  |             |  |          |  |                                  |  |                               |  |            | 309   |  |         |  | (18,516 | )               |  |  | (18,207                     | ) |  |      |         |   |  |     
|                             |  |             |  |          |  |                                  |  |                               |  |            |       |  |         |  |         |                 |  |  |                             |   |  |      |         |   |  |     
|                             |  | Margin      |  |          |  |                                  |  | Marginvalue                   |  |            | 4,018 |  |         |  |        |                 |  |  |                            |   |  |      |         |   |  |     
|Current                      |  |             |  |          |  |                                  |  |                               |  |            | 4,327 |  |         |  | (8,307  | )               |  |  |                            |   |  |      |         |   |  |     
|Non-current                  |  |             |  |          |  |                                  |  |                               |  |            |      |  |         |  | (10,209 | )               |  |  |                            |   |  |      |         |   |  |     
|Result from Derivatives      |  |             |  |          |  |                                  |  |                               |  |            | 386   |  |         |  | (19,694 | )               |  |  |                            |   |  |      |         |   |  |     

The Company uses derivative financial instruments as currency and forward contracts and forward commodities contracts to hedge
against currency risk and commodities prices, respectively. The Company does not hold any cash flow derivative financial instruments contracts as at June 30, 2014 and 2013.

The margin deposits in operations with derivatives refer to the so-called margins by counterparties in operations with derivative instruments.

Due to the variation in the volume sold at June 30, 2014 and 2013, the 2013/2014 and 2014/2015 harvest volume for which commodities derivatives were
contracted may vary, as indicated below:



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|              |  |                                        |        |  |           |  |        | 
|------------- |  | -------------------------------------- | ------ |  | --------- |  | ------ | 
|13/14 harvest |  |                                        |        |  |           | 
|06/30/2014    |  | % of hedged production volume expected |       
|              |  | % minimum                              |        |  | % maximum | 
|Soybean       |  |                                        | 92.60% |  |           |  | 92.60% | 
|Corn          |  |                                        | 54.60% |  |           |  | 54.60% | 



|              |  |                                 |       |  |           |  |       | 
|------------- |  | ------------------------------- | ----- |  | --------- |  | ----- | 
|14/15 harvest |  |                                 |       |  |           | 
|06/30/2014    |  | % of production volume expected |      
|              |  | % minimum                       |       |  | % maximum | 
|Soybean       |  |                                 | 5.30% |  |           |  | 5.30% | 
|Corn          |  |                                 | 0.00% |  |           |  | 0.00% | 

Derivatives are classified as current assets or liabilities. Fair values of hedging derivative financial
instruments used are classified as noncurrent assets or liabilities if the remaining maturity of the hedged item exceeds 12 months, and as current assets or liabilities if the maturity of the hedged item does not exceed 12 months.



|8. | Trade accounts receivable
|-- | -------------------------



|                                    |  |      |        |   |      |  |         |      |  |  |        |  
|----------------------------------- |  | ---- | ------ | - | ---- |  | ------- | ---- |  |  | ------ | -
|                                    |  | 2014 |        |   | 2013 |  |         | 2012 | 
|Sale of sugarcane (b)               |  |      | 7,423  |   |      |  | 11,273  |      |  |  | 3,207  |  
|Sale of grains (c)                  |  |      | 25,891 |   |      |  | 87,937  |      |  |  | 48,270 |  
|Lease of land                       |  |      | 599    |   |      |  | 1,424   |      |  |  | 685    |  
|Sale of machinery                   |  |      | 1,285  |   |      |  | 1,048   |      |  |  |       |  
|Sale of farms (d)                   |  |      | 30,865 |   |      |  | 31,218  |      |  |  | 9,445  |  
|                                    |  |      |        |   |      |  |         |      |  |  |        |  
|                                    |  |      | 66,063 |   |      |  | 132,900 |      |  |  | 61,607 |  
|                                    |  |      |        |   |      |  |         |      |  |  |        |  
|Allowance for doubtful accounts (a) |  |      | (1,053 | ) |      |  | (1,798  | )    |  |  | (952   | )
|                                    |  |      |        |   |      |  |         |      |  |  |        |  
|Total current                       |  |      | 65,010 |   |      |  | 131,102 |      |  |  | 60,655 |  
|                                    |  |      |        |   |      |  |         |      |  |  |        |  
|Sale of machinery                   |  |      | 566    |   |      |  | 830     |      |  |  |       |  
|Sale of farms (d)                   |  |      | 36,887 |   |      |  | 32,899  |      |  |  | 12,759 |  
|                                    |  |      |        |   |      |  |         |      |  |  |        |  
|Total non-current                   |  |      | 37,453 |   |      |  | 33,729  |      |  |  | 12,759 |  
|                                    |  |      |        |   |      |  |         |      |  |  |        |  

(a) Changes in the allowance for doubtful accounts



|                          |  |  |        |  
|------------------------- |  |  | ------ | -
|At June 30, 2012          |  |  | 952    |  
|Constitution of provision |  |  | 4,766  |  
|Disposal or reversal      |  |  | (3,920 | )
|                          |  |  |        |  
|At June 30, 2013          |  |  | 1,798  |  
|                          |  |  |        |  
|Constitution of provision |  |  | 1,549  |  
|Disposal or reversal      |  |  | (2,294 | )
|At June 30, 2014          |  |  | 1,053  |  
|                          |  |  |        |  



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The estimated losses in allowance for doubtful accounts were recorded as selling expenses in the statement of operations. The allowance for
doubtful accounts is set up by means of default analysis, individually by client, and the amounts included in the allowance are written-off when these amounts are no longer expected to be recovered.



|                |  |      |         |  |      |  |         |      |  |  |        | 
|--------------- |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------ | 
|                |  | 2014 |         |  | 2013 |  |         | 2012 | 
|Falling due:    |  |      |         |  |      |  |         |      |  |  |        | 
|Up to 30 days   |  |      | 43,248  |  |      |  | 92,237  |      |  |  | 15,389 | 
|31 to 90 days   |  |      | 9,090   |  |      |  | 87      |      |  |  | 32,885 | 
|91 to 180 days  |  |      | 534     |  |      |  | 3,977   |      |  |  | 1,218  | 
|181 to 360 days |  |      | 11,275  |  |      |  | 32,166  |      |  |  | 10,181 | 
|Over 360 days   |  |      | 37,453  |  |      |  | 33,729  |      |  |  | 12,759 | 
|Past due:       |  |      |         |  |      |  |         |      |  |  |        | 
|Up to 30 days   |  |      | 853     |  |      |  | 2,517   |      |  |  | 468    | 
|31 to 90 days   |  |      | 10      |  |      |  | 119     |      |  |  | 75     | 
|91 to 180 days  |  |      |        |  |      |  | 149     |      |  |  | 345    | 
|181 to 360 days |  |      | 140     |  |      |  | 1,648   |      |  |  | 146    | 
|Over 360 days   |  |      | 913     |  |      |  |        |      |  |  | 900    | 
|                |  |      |         |  |      |  |         |      |  |  |        | 
|                |  |      | 103,516 |  |      |  | 166,629 |      |  |  | 74,366 | 
|                |  |      |         |  |      |  |         |      |  |  |        | 



| | (b) | Sale of sugarcane
| | --- | -----------------

The receivables refer to the sale of sugarcane to ETH Bioenergia
(ETH).



| | (c) | Sale of grains
| | --- | --------------

The receivables refer mainly to the sale of corn and soybean to Bunge,
Amaggi and Multigrain.



| | (d) | Receivables for sale of farm
| | --- | ----------------------------



| | (i) | São Pedro Farm
| | --- | --------------

On September 28, 2011, the Company sold São Pedro
Farm for R$28,974, corresponding to 580,000 sacks of soybean. By June 30, 2014,the company collected R$19,771, equivalent to 395,000 sacks of soybean.

The resulting amount was discounted to present value using the average rate of 11.07% p.a. The amount recorded relating to present value
adjustment for the year ended June 30, 2014 is R$ 2,737 (June 30, 2013  R$ 842). The remaining balance, in the amount of R$7,815, corresponding to 185,000 sacks of soybean, shall be paid in two annual installments, falling due on
March 31, 2015 and 2016.



| | (ii) | Horizontina Farm
| | ---- | ----------------

On October 10, 2012, the Company announced an agreement to sell
Horizontina Farm for R$75,000. By June 2014, the company collected R$ 72,000. The remaining balance, in the amount of R$3,000, shall be paid upon fulfillment of certain conditions precedent. On June 30, 2013 the Company recorded gain on the
sale of Horizontina farm in the amount of R$22,083. Up to June 30, 2013, the Company invested in the property the amount of R$15,168 (net of accumulated depreciation) for infrastructure improvements.



| | (iii) | Araucária Farm (i)
| | ----- | ------------------

On April 25, 2013, the Company sold 394 hectares of
Araucária Farm for R$11,682, equivalent to 248,000 sacks of soybean, of which 310 hectares are suitable for cultivation purposes. By June 30, 2014, the company collected R$5,744, equivalent to 105,000 sacks of soybean. On June 30,
2014, the remaining balance is equivalent to 143,000 sacks of soybean and amounts to R$6,343, and shall be settled in four semi-annual installments, the last one against the grant of the deed, in August 2016. The Company recorded gain from the sale
of Araucária farm in the amount of R$6,437.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | (iv) | Araucária Farm (ii)
| | ---- | -------------------

On June 27, 2014, the Company sold 1,164 hectares of
Araucária Farm for R$ 41,341, equivalent to 735,000 sacks of soybean, of which 913 hectares are suitable for cultivation purposes. After the sale, the area of Araucária Farm is 8,178 hectares, of which approximately 5,982 hectares are
suitable for cultivation purposes. The amount of R$ 4,491 (equivalent to 75,000 sacks of soybean), as initial payment of the Acquisition Price, is receivable up to July 07, 2014. The second installment, in the amount of R$ 4,329 (equivalent to
75,000 sacks of soybean), falls due up to November 15, 2014. The remaining balance amounts to R$ 24,788 (equivalent to 585,000 sacks of soybean) and shall be paid in three installments falling due on August 31,2015, 2016, 2017 and the last
one against the grant of the deed, on August 31, 2018. The Company recorded gain on the sale of Araucária farm in the amount of R$ 21,845. Together with the sale agreement of Araucária farm, on July 8, 2014, the Company
executed, between the same parties, a loan for use agreement, whereby Brasilagro obtained temporary loan for use of the 913 hectares suitable for cultivation purposes. The purpose of the agreement is to allow Brasilagro to complete harvesting of the
sugarcane currently planted in the plots subject matter of the loan for use agreement, as the sugarcane was not acquired by the farm purchaser.



| | (v) | Cremaq Farm
| | --- | -----------

On May 10, 2013, the Company sold an area of 4,895 hectares of Cremaq
farm, of which 3,201 are suitable for cultivation purposes, for R$42,104, equivalent to 901,481 sacks of soybean (359 sacks per hectare suitable for cultivation purposes). After the sale, the farm has a total area of 27,807 hectares, of which
approximately 21,823 hectares are suitable for cultivation purposes. At June 30, 2014, receivables amount to R$30,345, equivalent to 504,829 sacks of soybean. At June 30, 2014 the remaining balance amounts to R$16,986 equivalent to 396,652
sacks of soybean and shall be received in two installments in June 2015 and 2016. At June 30, 2013, the Company recorded gain from the sale of Cremaq farm in the amount of R$26,295.

The remaining balances of São Pedro, Araucária and Cremaq farms were measured based on the soybean quote for future delivery, on
the maturity of each installment (or based on brokers estimates and quotes where there is no soybean quote for future delivery on specific maturity date), and based on the foreign Exchange rate of US dollars to reais for future delivery, also
on the maturity date.

The breakdown of sales of farm is as follows:



|                                |  |      |         |   |      |  |         |      |  |  |         |  
|------------------------------- |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                |  | 2014 |         |   | 2013 |  |         | 2012 | 
|Amount from sale of farm        |  |      | 33,737  |   |      |  | 122,713 |      |  |  | 23,291  |  
|Net carrying amount of the farm |  |      | (11,892 | ) |      |  | (67,898 | )    |  |  | (10,304 | )
|                                |  |      |         |   |      |  |         |      |  |  |         |  
|Gain from sale of farm          |  |      | 21,845  |   |      |  | 54,815  |      |  |  | 12,987  |  
|                                |  |      |         |   |      |  |         |      |  |  |         |  

Changes in accounts receivable are as follows:



|                                   |  |  |         |  
|---------------------------------- |  |  | ------- | -
|At June 30, 2013                   |  |  | 64,117  |  
|                                   |  |  |         |  
|Additions                          |  |  | 33,737  |  
|Collections                        |  |  | (35,255 | )
|Update value                       |  |  | 2,940   |  
|Unwind of present value adjustment |  |  | 2,213   |  
|                                   |  |  |         |  
|At June 30, 2014                   |  |  | 67,752  |  



|9. | Recoverable taxes
|-- | -----------------



|                                                              |  |      |        |  |      |  |        |      |  |  |        | 
|------------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                              |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Withholding income tax on short-term investments IRRF         |  |      | 3,142  |  |      |  | 4,447  |      |  |  | 5,494  | 
|Other recoverable taxes and contributions                     |  |      | 607    |  |      |  | 3,208  |      |  |  | 3,837  | 
|                                                              |  |      |        |  |      |  |        |      |  |  |        | 
|Total current                                                 |  |      | 3,749  |  |      |  | 7,655  |      |  |  | 9,331  | 
|                                                              |  |      |        |  |      |  |        |      |  |  |        | 
|State VAT recoverable-ICMS                                    |  |      | 7,914  |  |      |  | 6,546  |      |  |  | 5,199  | 
|State VAT recoverable on property, plant and equipment  ICMS |  |      | 239    |  |      |  | 430    |      |  |  | 514    | 
|Non-cumulative taxes on sale PIS and COFINS                   |  |      | 10,437 |  |      |  | 8,462  |      |  |  | 5,355  | 
|Withholding income tax on short-term investments  IRRF       |  |      | 11,259 |  |      |  | 10,298 |      |  |  | 11,735 | 
|                                                              |  |      |        |  |      |  |        |      |  |  |        | 
|Total noncurrent                                              |  |      | 29,849 |  |      |  | 25,736 |      |  |  | 22,803 | 
|                                                              |  |      |        |  |      |  |        |      |  |  |        | 



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





At June 30, 2014, the balances of federal and state indirect taxes may be offset against the taxes payable for the operations, and the
Company management may request authorization to the tax authorities to sell these tax credits to third parties and/or request the reimbursement of such taxes to the Government.

The Company has Contribution Tax on Gross Revenue for Social Integration Program (PIS) and Contribution Tax on Gross Revenue for Social
Security Financing (COFINS) cumulative credits linked to financial income and export for the period from 2008 to 2011, which were the subject matter of a reimbursement request to the RFB (Brazilian IRS), in the total amount of R$3,203. Of this
amount, R$301 relating to subsidiary Jaborandi was approved on February 17, 2014, and deposited in the Companys account in April 2014.

The Company filed with the Piauí State Department of Finance (Sefaz) a request with respect to the outstanding balance of ICMS in the
amount of R$ 3,091 to be transferred to another establishment of another taxpayer in the same state, in order to pay for the purchase of inputs and assets. Sefaz has partially accepted the Companys request, and approved R$581 related to these
credits to sale for export purposes in which it may be transferred to third parties.



|10. | Inventories
|--- | -----------



|                      |  |      |        |  |      |  |        |      |  |  |        | 
|--------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                      |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Sugarcane             |  |      |       |  |      |  |       |      |  |  | 2,238  | 
|Soybean               |  |      | 19,927 |  |      |  | 10,454 |      |  |  | 14,558 | 
|Corn                  |  |      | 9,551  |  |      |  | 3,803  |      |  |  | 10,530 | 
|Rice                  |  |      |       |  |      |  |       |      |  |  | 309    | 
|Cotton                |  |      |       |  |      |  | 105    |      |  |  | 737    | 
|Other harvests        |  |      | 40     |  |      |  |       |      |  |  | 90     | 
|Agricultural products |  |      | 29,518 |  |      |  | 14,362 |      |  |  | 28,462 | 
|Inputs                |  |      | 9,804  |  |      |  | 9,016  |      |  |  | 12,535 | 
|Advance to suppliers  |  |      | 888    |  |      |  | 5,427  |      |  |  | 31,561 | 
|                      |  |      |        |  |      |  |        |      |  |  |        | 
|                      |  |      | 40,210 |  |      |  | 28,805 |      |  |  | 72,558 | 
|                      |  |      |        |  |      |  |        |      |  |  |        | 

At June 30, 2014, the balance of provision for impairment of agricultural products after harvest is
R$1,644 (R$24 at June 30, 2013), on account of the total realization of inventories of finished product.

Selling expenses 
storage

The Company changed the accounting policy regarding accounting for storage expenses, previously capitalized in inventories, to
selling expenses, when incurred.

The comparative year is not restated, since the amounts are not significant and do not impact the
comparability of the financial statements.



|11. | Biological assets
|--- | -----------------



|                             |  |         |          |   |             |  |         |  
|---------------------------- |  | ------- | -------- | - | ----------- |  | ------- | -
|                             |  | Current |          |   | Non-current | 
|                             |  | Grains  |          |   | Sugarcane   | 
|At June 30, 2012             |  |         | 4,111    |   |             |  | 31,931  |  
|                             |  |         |          |   |             |  |         |  
|Expenditures with plantation |  |         | 123,028  |   |             |  | 55,568  |  
|Fair value variation         |  |         | 4,735    |   |             |  | 10,607  |  
|Harvest of agricultural      |  |         | (130,673 | ) |             |  | (61,450 | )
|                             |  |         |          |   |             |  |         |  
|At June 30, 2013             |  |         | 1,201    |   |             |  | 36,656  |  
|                             |  |         |          |   |             |  |         |  
|Expenditures with plantation |  |         | 118,793  |   |             |  | 38,620  |  
|Fair value variation         |  |         | (1,210   | ) |             |  | (4,613  | )
|Harvest of agricultural (i)  |  |         | (117,363 | ) |             |  | (39,461 | )
|                             |  |         |          |   |             |  |         |  
|At June 30, 2014             |  |         | 1,421    |   |             |  | 31,202  |  
|                             |  |         |          |   |             |  |         |  



F-46



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The expenditures with cultivation are substantially represented by expenditures incurred with the formation of harvests such as: seeds,
fertilizers, pesticides, depreciation and manpower used in the crops.

Changes in fair value of biological assets and agricultural
products



|                                               |  |      |          |   |      |  |          |  
|---------------------------------------------- |  | ---- | -------- | - | ---- |  | -------- | -
|                                               |  | 2014 |          |   | 2013 | 
|Fair value of production                       |  |      | 148,365  |   |      |  | 158,590  |  
|Cost of production                             |  |      | (141,450 | ) |      |  | (171,643 | )
|Changes in fair value of biological assets (i) |  |      | (5,823   | ) |      |  | 15,342   |  
|                                               |  |      |          |   |      |  |          |  
|                                               |  |      | 1,092    |   |      |  | 2,289    |  
|                                               |  |      |          |   |      |  |          |  

The period of plantation and harvest of biological assets is as follows:



|                  |  |             |  |                                   |  |                       |  |               |  |                 |  |               |  |               |  |               |  |               |  |               |  |           
|----------------- |  | ----------- |  | --------------------------------- |  | --------------------- |  | ------------- |  | --------------- |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | ------------- |  | ----------
|                  |  |             |  | Period from plantation to harvest
|Unit              |  | Location    |  | Sugarcane                         |  | Soybean               |  | Corn          |  | Secondcrop corn |  | Rice          |  | Cotton        |  | Sorghum       |  | Sesame        |  | Chiaseed      |  | Pasture   
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Cremaq Farm       |  | Piauí       |  | N/A                               |  | 25/10 to30/05         |  | 25/11 to30/06 |  | 01/02 to30/08   |  | 15/12 to15/05 |  | 30/11 to30/08 |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Jatobá Farm       |  | Bahia       |  | N/A                               |  | 25/10 to30/05         |  | 25/10 to30/06 |  | N/A             |  | NotPlanted    |  | 25/11 to30/08 |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Alto Taquari Farm |  | MatoGrosso  |  | 01/02 to30/11                     |  | 01/10 to28/02         |  | 01/10 to30/10 |  | N/A             |  | NotPlanted    |  | N/A           |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Araucária Farm    |  | Goiás       |  | 01/02 to30/11                     |  | 01/10 to28/02         |  | 01/10 to30/10 |  | N/A             |  | NotPlanted    |  | N/A           |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Chaparral Farm    |  | Bahia       |  | N/A                               |  | 01/11 to30/05         |  | 25/10 to05/12 |  | N/A             |  | NotPlanted    |  | 25/11 to30/08 |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Nova Buriti Farm  |  | MinasGerais |  | N/A                               |  | NotPlanted /Harvested |  | N/A           |  | N/A             |  | NotPlanted    |  | N/A           |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Preferência Farm  |  | Bahia       |  | N/A                               |  | NotPlanted /Harvested |  | N/A           |  | N/A             |  | NotPlanted    |  | N/A           |  | N/A           |  | N/A           |  | N/A           |  | Entireyear
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Partnership II    |  | Piauí       |  | N/A                               |  | 25/10 to30/05         |  | 25/11 to30/06 |  | 01/02 to30/08   |  | 15/12 to15/05 |  | 30/11 to30/08 |  | N/A           |  | N/A           |  | N/A           |  | N/A       
|                  |  |             |  |                                   |  |                       |  |               |  |                 | 
|Cresca            |  | Paraguay    |  | N/A                               |  | 01/12 to25/05         |  | 01/12 to30/06 |  | N/A             |  | N/A           |  | N/A           |  | 01/12 to15/06 |  | 01/02 to20/05 |  | 01/02 to20/05 |  | Entireyear

12. Restricted marketable securities



|                            |  |                  |  |      |        |  |      |  |        |      |  |  |        | 
|--------------------------- |  | ---------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                            |  | Restatementindex |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Non-current                 |  |                  |  |      |        |  |      |  |        |      |  |  |        | 
|Banco do Nordeste (BNB) (a) |  | CDI              |  |      | 13,782 |  |      |  | 17,988 |      |  |  | 3,061  | 
|Banco Itaú BBA (b)          |  | CDI              |  |      |       |  |      |  |       |      |  |  | 20,136 | 
|                            |  |                  |  |      |        |  |      |  |        |      |  |  |        | 
|                            |  |                  |  |      | 13,782 |  |      |  | 17,988 |      |  |  | 23,197 | 
|                            |  |                  |  |      |        |  |      |  |        |      |  |  |        | 



| | (a) | Securities in BNB refer to CDB pledged as guarantee to financing from Banco BNB, and should be held while the agreements remain effective. These mature in July 2019 and October 2021.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Securities were pledged as a guarantee to financing from Banco Itaú BBA, and should be held up to May 2013, according to loan agreement.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------



F-47



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|13. | Investment properties  noncurrent
|--- | ----------------------------------



|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|----------------------------- |  | ----------- | ------- | - | ------------------------- |  | ------ | -------------- |  |  | ----------------- | - |  | ----------------------- | ------- | - | ------------------------- |  | ------ | - |  |  | ------- | -
|                              |  | Land Farms |         |   | Buildings andimprovements |  |        | Openingof area |  |  | Total inoperation |   |  | Constructionin progress |         |   | Totalinvestmentproperties | 
|At June 30, 2012              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |  
|Opening balance               |  |             | 304,562 |   |                           |  | 13,992 |                |  |  | 64,087            |   |  |                         | 382,641 |   |                           |  | 1,046  |   |  |  | 383,687 |  
|Acquisitions                  |  |             | 826     |   |                           |  | 1,033  |                |  |  | 22,573            |   |  |                         | 24,432  |   |                           |  | 5,374  |   |  |  | 29,806  |  
|Disposals                     |  |             | (9,937  | ) |                           |  | (216   | )              |  |  |                  |   |  |                         | (10,153 | ) |                           |  |       |   |  |  | (10,153 | )
|Transfers                     |  |             |        |   |                           |  | 2,598  |                |  |  |                  |   |  |                         | 2,598   |   |                           |  | (2,598 | ) |  |  |        |  
|(-) Depreciation/amortization |  |             |        |   |                           |  | (892   | )              |  |  | (10,541           | ) |  |                         | (11,433 | ) |                           |  |       |   |  |  | (11,433 | )
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|Net book balance              |  |             | 295,451 |   |                           |  | 16,515 |                |  |  | 76,119            |   |  |                         | 388,085 |   |                           |  | 3,822  |   |  |  | 391,907 |  
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|At June 30, 2012              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |  
|Total cost                    |  |             | 295,451 |   |                           |  | 18,344 |                |  |  | 102,822           |   |  |                         | 416,617 |   |                           |  | 3,822  |   |  |  | 420,439 |  
|Accumulated depreciation      |  |             |        |   |                           |  | (1,829 | )              |  |  | (26,703           | ) |  |                         | (28,532 | ) |                           |  |       |   |  |  | (28,532 | )
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|Net book balance              |  |             | 295,451 |   |                           |  | 16,515 |                |  |  | 76,119            |   |  |                         | 388,085 |   |                           |  | 3,822  |   |  |  | 391,907 |  
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|At June 30, 2013              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |  
|Opening balance               |  |             | 295,451 |   |                           |  | 16,515 |                |  |  | 76,119            |   |  |                         | 388,085 |   |                           |  | 3,822  |   |  |  | 391,907 |  
|Acquisitions                  |  |             | 213     |   |                           |  | 943    |                |  |  | 18,247            |   |  |                         | 19,403  |   |                           |  | 5,554  |   |  |  | 24,957  |  
|Disposals                     |  |             | (47,540 | ) |                           |  | (669   | )              |  |  | (14,388           | ) |  |                         | (62,597 | ) |                           |  | (2,235 | ) |  |  | (64,832 | )
|Transfers                     |  |             |        |   |                           |  | 5,859  |                |  |  |                  |   |  |                         | 5,859   |   |                           |  | (5,859 | ) |  |  |        |  
|(-) Depreciation/amortization |  |             |        |   |                           |  | (1,260 | )              |  |  | (11,664           | ) |  |                         | (12,924 | ) |                           |  |       |   |  |  | (12,924 | )
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|Net book balance              |  |             | 248,124 |   |                           |  | 21,388 |                |  |  | 68,314            |   |  |                         | 337,826 |   |                           |  | 1,282  |   |  |  | 339,108 |  
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|At June 30, 2013              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |  
|Total cost                    |  |             | 248,124 |   |                           |  | 24,477 |                |  |  | 106,681           |   |  |                         | 379,282 |   |                           |  | 1,282  |   |  |  | 380,564 |  
|Accumulated depreciation      |  |             |        |   |                           |  | (3,089 | )              |  |  | (38,367           | ) |  |                         | (41,456 | ) |                           |  |       |   |  |  | (41,456 | )
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|Net book balance              |  |             | 248,124 |   |                           |  | 21,388 |                |  |  | 68,314            |   |  |                         | 337,826 |   |                           |  | 1,282  |   |  |  | 339,108 |  
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|At June 30, 2014              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |  
|Opening balance               |  |             | 248,124 |   |                           |  | 21,388 |                |  |  | 68,314            |   |  |                         | 337,826 |   |                           |  | 1,282  |   |  |  | 339,108 |  
|Acquisitions                  |  |             | 536     |   |                           |  | 275    |                |  |  | 14,163            |   |  |                         | 14,974  |   |                           |  | 5,885  |   |  |  | 20,859  |  
|Disposals                     |  |             | (10,661 | ) |                           |  |       |                |  |  | (2,094            | ) |  |                         | (12,755 | ) |                           |  | (4     | ) |  |  | (12,759 | )
|Transfers                     |  |             |        |   |                           |  | 2,020  |                |  |  | 627               |   |  |                         | 2,647   |   |                           |  | (2,647 | ) |  |  |        |  
|(-) Depreciation/amortization |  |             |        |   |                           |  | (45    | )              |  |  | (12,360           | ) |  |                         | (12,405 | ) |                           |  |       |   |  |  | (12,405 | )
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|Net book balance              |  |             | 237,999 |   |                           |  | 23,638 |                |  |  | 68,650            |   |  |                         | 330,287 |   |                           |  | 4,516  |   |  |  | 334,803 |  
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|At June 30, 2014              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |  
|Total cost                    |  |             | 237,999 |   |                           |  | 26,772 |                |  |  | 119,377           |   |  |                         | 384,148 |   |                           |  | 4,516  |   |  |  | 388,664 |  
|Accumulated depreciation      |  |             |        |   |                           |  | (3,134 | )              |  |  | (50,727           | ) |  |                         | (53,861 | ) |                           |  |       |   |  |  | (53,861 | )
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  
|Net book balance              |  |             | 237,999 |   |                           |  | 23,638 |                |  |  | 68,650            |   |  |                         | 330,287 |   |                           |  | 4,516  |   |  |  | 334,803 |  
|                              |  |             |         |   |                           |  |        |                |  |  |                   |   |  |                         |         |   |                           |  |        |   |  |  |         |  

Disposals for the year ended June 30, 2014 are due to:



| | (c) | Sale of Horizontina farm (Note 8), in the amount of R$1,440, related to the opening of areas in operation.
| | --- | ----------------------------------------------------------------------------------------------------------



| | (d) | Termination of the lease contract with Regalito farm, in the amount of R$360, related to the opening of area.
| | --- | -------------------------------------------------------------------------------------------------------------



| | (e) | Opening of area for the harvest of soybean in Preferência farm, in the amount of R$294.
| | --- | ---------------------------------------------------------------------------------------



| | (f) | Sale of Araucária farm (Note 8), in the amount of R$ 10,660, related to the disposal of land.
| | --- | ---------------------------------------------------------------------------------------------



F-48



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The fair value investment properties of as follows:



|             |  |              |  |              |        |  |              |           |        |              |  |         |             |  |             |                  |      |           |  |      |         |  |      |  |         |  |  |  |         | 
|------------ |  | ------------ |  | ------------ | ------ |  | ------------ | --------- | ------ | ------------ |  | ------- | ----------- |  | ----------- | ---------------- | ---- | --------- |  | ---- | ------- |  | ---- |  | ------- |  |  |  | ------- | 
|Farm         |  | State        |  | 2014Hectares |        |  | 2013Hectares |           |        | 2012Hectares |  |         | Real estate |  | Acquisition |                  | 2014 |           |  | 2013 |         |  | 2012 | 
|São Pedro    |  | Goiás        |  |              |       |  |              |           |       |              |  |         |            |  |             | Araucária Ltda.  |      | Set/2006  |  |      |        |  |      |  |        |  |  |  |        | 
|Jatobá       |  | Bahia        |  |              | 31,606 |  |              |           | 31,606 |              |  |         | 31,606      |  |             | Jaborandi S.A.   |      | Mar/2007  |  |      | 314,436 |  |      |  | 227,688 |  |  |  | 179,758 | 
|Araucária    |  | Goiás        |  |              | 9,682  |  |              |           | 9,288  |              |  |         | 9,682       |  |             | Araucária Ltda.  |      | Apr/2007  |  |      | 192,223 |  |      |  | 168,304 |  |  |  | 111,646 | 
|Alto Taquari |  | Mato Grosso  |  |              | 5,395  |  |              |           | 5,186  |              |  |         | 5,186       |  |             | Mogno Ltda.      |      | Aug/2007  |  |      | 101,764 |  |      |  | 107,296 |  |  |  | 62,302  | 
|Chaparral    |  | Bahia        |  |              | 37,183 |  |              |           | 37,183 |              |  |         | 37,183      |  |             | Cajueiro Ltda.   |      | Nov/2007  |  |      | 275,382 |  |      |  | 196,536 |  |  |  | 173,674 | 
|Cremaq       |  | Piauí        |  |              | 27,618 |  |              |           | 27,807 |              |  |         | 32,702      |  |             | Cremaq Ltda.     |      | Oct/2006  |  |      | 251,354 |  |      |  | 231,585 |  |  |  | 222,320 | 
|Preferência  |  | Bahia        |  |              | 17,799 |  |              |           | 17,799 |              |  |         | 17,799      |  |             | Cajueiro Ltda.   |      | Sept/2008 |  |      | 50,585  |  |      |  | 39,648  |  |  |  | 36,759  | 
|Horizontina  |  | Maranhão     |  |              |        |  |              |           |       |              |  |         | 14,358      |  |             | Ceibo Ltda.      |      | Apr/2010  |  |      |        |  |      |  |        |  |  |  | 72,689  | 
|Nova Buriti  |  | Minas Gerais |  |              | 24,211 |  |              |           | 24,247 |              |  |         | 24,247      |  |             | Flamboyant Ltda. |      | Dec/2007  |  |      | 22,271  |  |      |  | 28,657  |  |  |  | 26,519  | 
|             |  |              |  |              |        |  |              |           |        |              |  |         |             |  |             |                  |      |           |  |      |         |  |      |  |         |  |  |  |         | 
|             |  |              |  |              |        |  |              | 1,208,015 |        |              |  | 999,714 |             |  |             | 885,667          |     
|             |  |              |  |              |        |  |              |           |        |              |  |         |             |  |             |                  |      |           |  |      |         |  |      |  |         |  |  |  |         | 

The table below shows the historical cost of acquisition of land and later improvements, as regards to our
agricultural properties, at June 30, 2014.



|                  |  |                            |  |                 |  |           |         |  |                    |  |      |                                 |  |  |                                          |  |  |  |       | 
|----------------- |  | -------------------------- |  | --------------- |  | --------- | ------- |  | ------------------ |  | ---- | ------------------------------- |  |  | ---------------------------------------- |  |  |  | ----- | 
|Property          |  | Location                   |  | AcquisitionDate |  | TotalArea |         |  | Acquisitionat cost |  |      | Costimprovementsat June 30,2014 |  |  | Farms andcostimprovementsatJune 30, 2014 | 
|                  |  |                            |  |                 |  | (ha)      |         |  | (R$ million)       | 
|Cremaq Farm       |  | Baixa Grande do Ribeiro/PI |  | Oct /06         |  |           | 27,807  |  |                    |  | 35,9 |                                 |  |  | 28,9                                     |  |  |  | 64,8  | 
|Jatobá Farm       |  | Jaborandi/BA               |  | Mar /07         |  |           | 31,606  |  |                    |  | 33,4 |                                 |  |  | 31,8                                     |  |  |  | 65,2  | 
|Alto Taquari Farm |  | Alto Taquari/MT            |  | Aug / 07        |  |           | 5,186   |  |                    |  | 33,2 |                                 |  |  | 0,1                                      |  |  |  | 33,3  | 
|Araucária Farm    |  | Mineiros/GO                |  | Apr /07         |  |           | 8,124   |  |                    |  | 56,2 |                                 |  |  | 1,3                                      |  |  |  | 57,5  | 
|Chaparral Farm    |  | Correntina/BA              |  | Nov / 07        |  |           | 37,183  |  |                    |  | 46,7 |                                 |  |  | 15,1                                     |  |  |  | 61,8  | 
|Nova Buriti Farm  |  | Januaria/MG                |  | Dec /07         |  |           | 24,247  |  |                    |  | 21,6 |                                 |  |  | 0,4                                      |  |  |  | 21,9  | 
|Preferência Farm  |  | Barreiras/BA               |  | Sep /08         |  |           | 17,799  |  |                    |  | 11   |                                 |  |  | 18,8                                     |  |  |  | 29,8  | 
|                  |  |                            |  |                 |  |           |         |  |                    |  |      |                                 |  |  |                                          |  |  |  |       | 
|Total             |  |                            |  |                 |  |           | 151,952 |  |                    |  | 238  |                                 |  |  | 96,4                                     |  |  |  | 334,3 | 
|                  |  |                            |  |                 |  |           |         |  |                    |  |      |                                 |  |  |                                          |  |  |  |       | 



|14. | Investments
|--- | -----------



| | a) | Changes in investments
| | -- | ----------------------



|                                    |  |              |      |   |            |  |        |       |  |  |        |  
|----------------------------------- |  | ------------ | ---- | - | ---------- |  | ------ | ----- |  |  | ------ | -
|                                    |  | GreenEthanol |      |   | Cresca (i) |  |        | Total | 
|Changes in balance at June 30, 2012 |  |              | 410  |   |            |  |       |       |  |  | 410    |  
|Impairment                          |  |              | (340 | ) |            |  |       |       |  |  | (340   | )
|Changes in balance at June 30, 2013 |  |              | 70   |   |            |  |       |       |  |  | 70     |  
|                                    |  |              |      |   |            |  |        |       |  |  |        |  
|Acquisition of investment           |  |              |     |   |            |  | 39,875 |       |  |  | 39,875 |  
|Capital increase                    |  |              |     |   |            |  | 14,463 |       |  |  | 14,463 |  
|Equity pick-up                      |  |              | (17  | ) |            |  | (687   | )     |  |  | (704   | )
|Effect from translation adjustment  |  |              |     |   |            |  | (3,335 | )     |  |  | (3,335 | )
|                                    |  |              |      |   |            |  |        |       |  |  |        |  
|Balance at June 30, 2014            |  |              | 53   |   |            |  | 50,316 |       |  |  | 50,369 |  
|                                    |  |              |      |   |            |  |        |       |  |  |        |  



| | (i) | On December 17, 2013, the Company made a capital contribution in the amount of R$14,463 to Cresca S.A., so that Cresca exercised the call option of 35,000 hectares of land. The balance of investment in joint
venture amount to R$50,316.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cresca equity is R$40,545, and Brasilagro interest is 50% R$20,272. In addition, the investment
includes R$ 30,044 recognized at the date of purchase of interest (Note 14 d).



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





| | b) | Purchase of interest in joint venture, debts and advisory service agreement with Cresca S.A.
| | -- | --------------------------------------------------------------------------------------------

On December 12, 2013 the Company entered into an agreement with Cresud S.A. (Cresud), its controlling shareholder, for:
(i) the acquisition of 50% interest in Cresca S.A, (ii) assumption of Cresud credit with Cresca, and (iii) the acquisition of an advisory service agreement, pursuant to which Cresud agrees to render services to Cresca in exchange for
payment of fees.

Cresca is a company that explores the agricultural activity and invests in cattle raising land. At the purchase
date, it had approximately 81,000 hectares and the option to purchase approximately 61,000 additional hectares of agricultural land in the region of Mariscal Estigarribia in Paraguay. The purchase of 61,000 hectares shall occur according to the
contractual terms upon the payment of the purchase price by Cresca when the land owner (the other Crescas investor) shall transfer the ownership of the land. The purchase of 30,500 hectares occurred on July 09, 2014 and the contractual
terms establish up to December 09, 2014 for the purchase of the remaining 30,500 hectares.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The Company assessed and concluded that Cresca is a joint venture, since the decisions on relevant activities require the unanimous consent of the Company and
of another shareholder owning the remaining 50% interest. The Company has no rights on the assets and liabilities of Cresca, but on its equity.

The
investment in Cresca was recognized upon its purchase at December 12, 2013 and considering that profit or loss for the nineteenday period ended December 31, 2013 is not material, the Company recognized the equity pick up of Cresca as
from January 1, 2014.

The purchase price allocation process initially carried out on estimated basis was finalized at June 30, 2014, within the
12 month period allowed by IFRS 3.

The table below presents the estimated fair value of Cresca assets and liabilities at the acquisition date, presenting
both the estimated fair values and the final fair values.



|                                                         |  |                      |        |  |                                    |  |        | 
|-------------------------------------------------------- |  | -------------------- | ------ |  | ---------------------------------- |  | ------ | 
|                                                         |  | Final fairvalue  R$ |        |  | Originallyestimated fairvalue  R$ | 
|Assets                                                   |  |                      |        |  |                                    | 
|Current                                                  |  |                      |        |  |                                    |  |        | 
|Cash and cash equivalents                                |  |                      | 10     |  |                                    |  | 10     | 
|Accounts receivable, inventories and other receivables   |  |                      | 7,082  |  |                                    |  | 7,439  | 
|Bargain contract for the purchase of land                |  |                      | 34,705 |  |                                    |  | 11,183 | 
|Noncurrent                                               |  |                      |        |  |                                    |  |        | 
|Investment properties                                    |  |                      | 92,905 |  |                                    |  | 91,589 | 
|Other noncurrent                                         |  |                      | 4,197  |  |                                    |  | 4,346  | 
|Liabilities                                              |  |                      |        |  |                                    |  |        | 
|Current, including trade payables, taxes and loans       |  |                      | 5,839  |  |                                    |  | 9,119  | 
|Noncurrent, including taxes and loans                    |  |                      | 53,310 |  |                                    |  | 49,434 | 
|                                                         |  |                      |        |  |                                    |  |        | 
|Total net assets                                         |  |                      | 79,750 |  |                                    |  | 56,014 | 
|                                                         |  |                      |        |  |                                    |  |        | 
|Companys interest in Cresca                             |  |                      | 50%    |  |                                    |  | 50%    | 
|                                                         |  |                      |        |  |                                    |  |        | 
|Companys interest in net assets at estimated fair value |  |                      | 39,875 |  |                                    |  | 28,007 | 
|                                                         |  |                      |        |  |                                    |  |        | 

The table below presents the amount of consideration including contingent consideration and resulting gain from bargain
purchase both at the originally estimated and the final amounts.



|                                                          |  |                      |        |  |                      |  |        | 
|--------------------------------------------------------- |  | -------------------- | ------ |  | -------------------- |  | ------ | 
|                                                          |  | Re-estimate          |        |  | Original estimate    | 
|                                                          |  | (in thousands of R$) |        |  | (in thousands of R$) | 
|Price paid in cash                                        |  |                      | 8,592  |  |                      |  | 8,592  | 
|Portion to be paid, adjusted to present value (a)         |  |                      | 11,546 |  |                      |  | 11,546 | 
|Portion of contingent consideration at the fair value (b) |  |                      | 1,079  |  |                      |  | 350    | 
|                                                          |  |                      |        |  |                      |  |        | 
|Total consideration                                       |  |                      | 21,217 |  |                      |  | 20,488 | 
|                                                          |  |                      |        |  |                      |  |        | 
|Gain from bargain purchase                                |  |                      | 18,658 |  |                      |  | 7,519  | 
|                                                          |  |                      |        |  |                      |  |        | 
|Investments                                               |  |                      | 39,875 |  |                      |  | 28,007 | 
|                                                          |  |                      |        |  |                      |  |        | 



|(a) | Denominated in US$ with interest rate of 7% p.a. and maturity at 12/12/2014.
|--- | ----------------------------------------------------------------------------

|(b) | Should Cresca sell up to 12/12/2014 24,000 hectares of land not developed, the Company shall pay Cresud 25% of the excess of the selling price per hectare in relation to a price per hectare contractually established.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The Companys interest in the joint venture was measured at the fair value of the assets acquired and liabilities assumed at the
acquisition date, proportional to the Companys interest in the joint venture. The option for measurement at fair value is because Cresca acquisition is in line with the strategy of expansion and development of border land and international
expansion, in addition to benefits to be received as compensation for the rendering of advisory services in the development of real estate owned by Cresca, which generates potential regular flow of resources and opportunity to perform, in foreign
land, activities which are in the expertise field of the Company.

Since the consideration paid was lower than the Companys interest
in the fair value of assets and liabilities of Cresca, a gain from bargain purchase in the amount of R$18,658 was determined and recorded in equity as it represents a transaction with controlling shareholder.

Deferred income tax liability of R$6,344 was not recognized on the gain from bargain purchase in the amount of R$18,658, considering that it
shall be reverted only upon the sale of interest in Cresca, decision which is under the Companys control; the Company has no plans of selling such interest in the foreseeable future.

The estimated fair value of R$21,852 related to the purchase of credits of Cresud from Cresca was recorded as Transactions with Related
Parties. The premium on the purchase in relation to the book value of the debt in the amount of R$1,050 shall be recognized in statement of operations as a reduction in revenue from interest, based on the effective interest rate during the
contractual term of receivables.

The acquisition of the advisory service agreement from Cresud, in the amount of R$2,916, was recorded as
Intangible assets at the acquisition cost, as mentioned in Note 2.4.

We present below the main financial information of Cresca Joint
Venture at June 30, 2014 and P&L for the six month period then ended.



|                                                                                 |  |                              |         | 
|-------------------------------------------------------------------------------- |  | ---------------------------- | ------- | 
|                                                                                 |  | June 30, 2014                |        
|                                                                                 |  | Re-estimated fair value  R$ |        
|Assets                                                                           |  |                              |         | 
|Current                                                                          |  |                              |         | 
|Cash and cash equivalents                                                        |  |                              | 862     | 
|Accounts receivable, inventories and other receivables                           |  |                              | 8,216   | 
|Bargain contract of purchase of land                                             |  |                              | 32,752  | 
|Noncurrent                                                                       |  |                              |         | 
|Investment properties                                                            |  |                              | 118,688 | 
|Other noncurrent                                                                 |  |                              | 2,073   | 
|                                                                                 |  |                              |         | 
|Total assets                                                                     |  |                              | 162,591 | 
|                                                                                 |  |                              |         | 
|Liabilities                                                                      |  |                              |         | 
|Current                                                                          |  |                              |         | 
|Financial liabilities                                                            |  |                              | 5,455   | 
|Salaries and payroll charges                                                     |  |                              | 147     | 
|Noncurrent                                                                       |  |                              |         | 
|Financial liabilities                                                            |  |                              | 51,116  | 
|Deferred tax                                                                     |  |                              | 5,632   | 
|                                                                                 |  |                              |         | 
|Total liabilities                                                                |  |                              | 62,350  | 
|                                                                                 |  |                              |         | 
|Total net assets                                                                 |  |                              | 100,241 | 
|                                                                                 |  |                              |         | 
|Companys interest in Cresca                                                     |  |                              | 50%     | 
|Companys interest in assets and liabilities at estimated fair value             |  |                              | 50,121  | 
|                                                                                 |  |                              |         | 
|Amortization of fair value adjustment at the purchase date (shareholders loans) |  |                              | 195     | 
|                                                                                 |  |                              |         | 
|Companys interest in net assets at estimated fair value                         |  |                              | 50,316  | 
|                                                                                 |  |                              |         | 



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                                                                                 |  |                            |        |  
|-------------------------------------------------------------------------------- |  | -------------------------- | ------ | -
|                                                                                 |  | January 1 to June 30, 2014 |       
|Revenue                                                                          |  |                            | 10,834 |  
|Cost of products sold (*)                                                        |  |                            | (6,423 | )
|Administrative expenses (*)                                                      |  |                            | (2,204 | )
|Financial income (expenses)                                                      |  |                            | (2,043 | )
|                                                                                 |  |                            |        |  
|Income before taxes on profit                                                    |  |                            | 164    |  
|                                                                                 |  |                            |        |  
|Income and social contribution taxes                                             |  |                            | (1,927 | )
|Profit (loss) for the year of current transactions                               |  |                            | (1,763 | )
|Groups proportional interest                                                    |  |                            | (882   | )
|Amortization of fair value adjustment at the purchase date (shareholders loans) |  |                            | 195    |  
|                                                                                 |  |                            |        |  
|Equity pick-up                                                                   |  |                            | (687   | )
|                                                                                 |  |                            |        |  



| | (*) | Depreciation for the six month period ended June 30, 2014 is R$358.
| | --- | -------------------------------------------------------------------

As previously
described, Cresca agreed to purchase 61,000 hectares representing maximum contractual payments of approximately US$ 21,350, to be paid up to December 9, 2014. There are no significant contingencies of Cresca. Brasilagro agreed to carry out
capital transfers in cash for 50% of the amounts above, which shall be due by Cresca upon the purchase of land.





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|15. | Intangible assets
|--- | -----------------



|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|------------------------- |  | ------------ | ------ | - | ----------- |  | ---- | --------- |  |  | ----- | - |  |  | ------ | -
|                          |  | Software     |       
|                          |  | In operation |        |   | In progress |  |      | Contracts |  |  | Total |  
|At June 30, 2012          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Opening balance           |  |              | 2,612  |   |             |  | 134  |           |  |  |      |   |  |  | 2,746  |  
|Acquisitions              |  |              | 1,491  |   |             |  |     |           |  |  |      |   |  |  | 1,491  |  
|Disposals                 |  |              |       |   |             |  |     |           |  |  |      |   |  |  |       |  
|Amortization for the year |  |              | (1,496 | ) |             |  |     |           |  |  |      |   |  |  | (1,496 | )
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2012          |  |              | 2,607  |   |             |  | 134  |           |  |  |      |   |  |  | 2,741  |  
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2012          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Total cost                |  |              | 4,103  |   |             |  | 134  |           |  |  |      |   |  |  | 4,237  |  
|Accumulated depreciation  |  |              | (1,496 | ) |             |  |     |           |  |  |      |   |  |  | (1,496 | )
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Net book balance          |  |              | 2,607  |   |             |  | 134  |           |  |  |      |   |  |  | 2,741  |  
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2013          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Opening balance           |  |              | 2,607  |   |             |  | 134  |           |  |  |      |   |  |  | 2,741  |  
|Acquisitions              |  |              | 316    |   |             |  | 379  |           |  |  |      |   |  |  | 695    |  
|Disposals                 |  |              | (1     | ) |             |  |     |           |  |  |      |   |  |  | (1     | )
|Transfers                 |  |              | 464    |   |             |  | (464 | )         |  |  |      |   |  |  |       |  
|Amortization for the year |  |              | (865   | ) |             |  |     |           |  |  |      |   |  |  | (865   | )
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2013          |  |              | 2,521  |   |             |  | 49   |           |  |  |      |   |  |  | 2,570  |  
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2013          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Total cost                |  |              | 4,882  |   |             |  | 49   |           |  |  |      |   |  |  | 4,931  |  
|Accumulated depreciation  |  |              | (2,361 | ) |             |  |     |           |  |  |      |   |  |  | (2,361 | )
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Net book balance          |  |              | 2,521  |   |             |  | 49   |           |  |  |      |   |  |  | 2,570  |  
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2014          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Opening balance           |  |              | 2,521  |   |             |  | 49   |           |  |  |      |   |  |  | 2,570  |  
|Acquisitions              |  |              | 44     |   |             |  | 578  |           |  |  | 2,916 |   |  |  | 3,538  |  
|Disposals                 |  |              | (10    | ) |             |  |     |           |  |  |      |   |  |  | (10    | )
|Transfers                 |  |              | 627    |   |             |  | (627 | )         |  |  |      |   |  |  |       |  
|Amortization for the year |  |              | (969   | ) |             |  |     |           |  |  | (163  | ) |  |  | (1,132 | )
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2014          |  |              | 2,213  |   |             |  |     |           |  |  | 2,753 |   |  |  | 4,966  |  
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|At June 30, 2014          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Total cost                |  |              | 5,543  |   |             |  |     |           |  |  | 2,916 |   |  |  | 8,459  |  
|Accumulated depreciation  |  |              | (3,330 | ) |             |  |     |           |  |  | (163  | ) |  |  | (3,493 | )
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  
|Net book balance          |  |              | 2,213  |   |             |  |     |           |  |  | 2,753 |   |  |  | 4,966  |  
|                          |  |              |        |   |             |  |      |           |  |  |       |   |  |  |        |  



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





16. Property, plant and equipment



|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|------------------------------------------------ |  | ------------------------- | ---- | - | ---------------------- |  | ------ | -------------------------------- |  |  | ------------------- | - |  | ---------------- | ----- | - | ----------------------- |  | ------- | -------- |  |  | --- | - |  |  | ------- | -
|                                                 |  | Buildings andimprovements |      |   | Equipmentandfacilities |  |        | Vehiclesandagriculturalmachinery |  |  | Furnitureandfixture |   |  | TotalinOperation |       |   | Constructionin progress |  |         | TotalPPE | 
|At June 30, 2012                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Opening balance                                  |  |                           | 298  |   |                        |  | 2,062  |                                  |  |  | 9,949               |   |  |                  | 456   |   |                         |  | 12,765  |          |  |  |    |   |  |  | 12,765  |  
|Acquisitions                                     |  |                           |     |   |                        |  | 969    |                                  |  |  | 5,306               |   |  |                  | 293   |   |                         |  | 6,568   |          |  |  |    |   |  |  | 6,568   |  
|Transfers                                        |  |                           |     |   |                        |  | (31    | )                                |  |  | (63                 | ) |  |                  | (7    | ) |                         |  | (101    | )        |  |  |    |   |  |  | (101    | )
|Depreciation                                     |  |                           | (134 | ) |                        |  | (388   | )                                |  |  | (3,007              | ) |  |                  | (73   | ) |                         |  | (3,602  | )        |  |  |    |   |  |  | (3,602  | )
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Net book balance                                 |  |                           | 164  |   |                        |  | 2,612  |                                  |  |  | 12,185              |   |  |                  | 669   |   |                         |  | 15,630  |          |  |  |    |   |  |  | 15,630  |  
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|At June 30, 2012                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Total cost                                       |  |                           | 714  |   |                        |  | 3,741  |                                  |  |  | 18,633              |   |  |                  | 881   |   |                         |  | 23,969  |          |  |  |    |   |  |  | 23,969  |  
|Accumulated depreciation                         |  |                           | (550 | ) |                        |  | (1,129 | )                                |  |  | (6,448              | ) |  |                  | (212  | ) |                         |  | (8,339  | )        |  |  |    |   |  |  | (8,339  | )
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Net book balance                                 |  |                           | 164  |   |                        |  | 2,612  |                                  |  |  | 12,185              |   |  |                  | 669   |   |                         |  | 15,630  |          |  |  |    |   |  |  | 15,630  |  
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|At June 30, 2013                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Opening balance                                  |  |                           | 164  |   |                        |  | 2,612  |                                  |  |  | 12,185              |   |  |                  | 669   |   |                         |  | 15,630  |          |  |  |    |   |  |  | 15,630  |  
|Acquisitions                                     |  |                           |     |   |                        |  | 472    |                                  |  |  | 2,005               |   |  |                  | 211   |   |                         |  | 2,688   |          |  |  |    |   |  |  | 2,688   |  
|Disposals                                        |  |                           |     |   |                        |  | (102   | )                                |  |  | (1,948              | ) |  |                  | (10   | ) |                         |  | (2,060  | )        |  |  |    |   |  |  | (2,060  | )
|Transfers                                        |  |                           |     |   |                        |  |       |                                  |  |  |                    |   |  |                  |      |   |                         |  |        |          |  |  |    |   |  |  |        |  
|Depreciation                                     |  |                           | (127 | ) |                        |  | (459   | )                                |  |  | (721                | ) |  |                  | (100  | ) |                         |  | (1,407  | )        |  |  |    |   |  |  | (1,407  | )
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Net book balance                                 |  |                           | 37   |   |                        |  | 2,523  |                                  |  |  | 11,521              |   |  |                  | 770   |   |                         |  | 14,851  |          |  |  |    |   |  |  | 14,851  |  
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|At June 30, 2013                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Total cost                                       |  |                           | 714  |   |                        |  | 4,111  |                                  |  |  | 18,690              |   |  |                  | 1,082 |   |                         |  | 24,597  |          |  |  |    |   |  |  | 24,597  |  
|Accumulated depreciation                         |  |                           | (677 | ) |                        |  | (1,588 | )                                |  |  | (7,169              | ) |  |                  | (312  | ) |                         |  | (9,746  | )        |  |  |    |   |  |  | (9,746  | )
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Net book balance                                 |  |                           | 37   |   |                        |  | 2,523  |                                  |  |  | 11,521              |   |  |                  | 770   |   |                         |  | 14,851  |          |  |  |    |   |  |  | 14,851  |  
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|At June 30, 2014                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Opening balance                                  |  |                           | 37   |   |                        |  | 2,523  |                                  |  |  | 11,521              |   |  |                  | 770   |   |                         |  | 14,851  |          |  |  |    |   |  |  | 14,851  |  
|Acquisitions                                     |  |                           |     |   |                        |  | 723    |                                  |  |  | 831                 |   |  |                  | 199   |   |                         |  | 1,753   |          |  |  | 38  |   |  |  | 1,791   |  
|Disposals                                        |  |                           |     |   |                        |  | (42    | )                                |  |  | (746                | ) |  |                  | (32   | ) |                         |  | (820    | )        |  |  |    |   |  |  | (820    | )
|Transfers                                        |  |                           | 38   |   |                        |  |       |                                  |  |  |                    |   |  |                  |      |   |                         |  | 38      |          |  |  | (38 | ) |  |  |        |  
|Depreciation                                     |  |                           | (39  | ) |                        |  | (487   | )                                |  |  | (1,636              | ) |  |                  | (118  | ) |                         |  | (2,280  | )        |  |  |    |   |  |  | (2,280  | )
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Net book balance                                 |  |                           | 36   |   |                        |  | 2,717  |                                  |  |  | 9,970               |   |  |                  | 819   |   |                         |  | 13,542  |          |  |  |    |   |  |  | 13,542  |  
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|At June 30, 2014                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Total cost                                       |  |                           | 752  |   |                        |  | 4,792  |                                  |  |  | 18,775              |   |  |                  | 1,249 |   |                         |  | 25,568  |          |  |  |    |   |  |  | 25,568  |  
|Accumulated depreciation                         |  |                           | (716 | ) |                        |  | (2,075 | )                                |  |  | (8,805              | ) |  |                  | (430  | ) |                         |  | (12,026 | )        |  |  |    |   |  |  | (12,026 | )
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Net book balance                                 |  |                           | 36   |   |                        |  | 2,717  |                                  |  |  | 9,970               |   |  |                  | 819   |   |                         |  | 13,542  |          |  |  |    |   |  |  | 13,542  |  
|                                                 |  |                           |      |   |                        |  |        |                                  |  |  |                     |   |  |                  |       |   |                         |  |         |          |  |  |     |   |  |  |         |  
|Annual depreciation rates (weighted average)  % |  |                           | 18   |   |                        |  | 11     |                                  |  |  | 18                  |   |  |                  | 10    |   |                         |  |         |          |  |  |     |   |  |  |         |  



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The Company has two farms in guarantee, according to Note 19.

Management reviewed the residual value and the estimated useful lives of vehicles and agricultural machinery, according to market value
evaluation conducted through surveys carried out by the Group, also taking into consideration the conditions of use of this equipment, and concluded that there is no indication of impairment loss for the year ended June 30, 2014.



|17. | Payables for purchase of farms
|--- | ------------------------------



|                  |  |      |        |  |      |  |        |      |  |  |        | 
|----------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                  |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Jatobá Farm       |  |      |       |  |      |  | 2,163  |      |  |  | 1,974  | 
|Alto Taquari Farm |  |      | 26,060 |  |      |  | 23,841 |      |  |  | 22,296 | 
|Nova Buriti Farm  |  |      | 18,760 |  |      |  | 17,646 |      |  |  | 16,588 | 
|                  |  |      |        |  |      |  |        |      |  |  |        | 
|                  |  |      | 44,820 |  |      |  | 43,650 |      |  |  | 40,858 | 
|                  |  |      |        |  |      |  |        |      |  |  |        | 

The balances are monetarily restated as follows: (i) Alto Taquari Farm- 100% of Interbank Deposit
Certificate (CDI) and (ii) Nova Buriti Farm  General Market Price Index (IGP-M).

The payments related to the
purchase of farms are linked to the fulfillment of certain conditions precedent by the sellers for the obtaining of licenses. The amounts are restated at market rates.



|18. | Trade accounts payables
|--- | -----------------------

The outstanding balances correspond to payables for the
purchase of inputs and services used for the planting and development of crops in the amount of R$6,908 (R$6,890 in 2013) and lease transactions of farms with third parties in the amount of R$1,250 (R$887 in 2013).



|19. | Loans and financing
|--- | -------------------



|                                              |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|--------------------------------------------- |  | -------- |  | ------------------------------------ |  | ---- | ------- |  | ---- |  | ------- | ---- |  |  | ------ | 
|                                              |  | Maturity |  | Annual interest ratesand charges  % |  | 2014 |         |  | 2013 |  |         | 2012 | 
|Current                                       |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|Financing for Agricultural Costs              |  | Jul-14   |  | 7.23 and 10.69                       |  |      | 44,712  |  |      |  | 31,403  |      |  |  | 25,561 | 
|Financing Cremaq and Jaborandi  Project      |  | Oct-14   |  | 7.23                                 |  |      | 12,742  |  |      |  | 7,845   |      |  |  | 10,941 | 
|Financing of Machinery and Equipment  FINAME |  | Mar-15   |  | 5.50 to 8.70                         |  |      | 1,814   |  |      |  | 2,164   |      |  |  | 2,694  | 
|Financing of sugarcane                        |  | Oct-14   |  | TJLP + 3.00 to 3.10                  |  |      | 2,985   |  |      |  | 3,517   |      |  |  | 3,871  | 
|                                              |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|                                              |  |          |  |                                      |  |      | 62,253  |  |      |  | 44,929  |      |  |  | 43,067 | 
|                                              |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|Non-current                                   |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|Financing of sugarcane                        |  | Jul-15   |  | TJLP + 3.00 to 3.10                  |  |      | 1,610   |  |      |  | 4,287   |      |  |  | 7,869  | 
|Financing of Machinery and Equipment  FINAME |  | Nov-16   |  | 5.50 to 8.70                         |  |      | 1,056   |  |      |  | 2,769   |      |  |  | 5,358  | 
|Financing Cremaq Project and Jaborandi        |  | Oct-21   |  | 7.23 and SELIC/TJLP + 4.45           |  |      | 55,243  |  |      |  | 49,868  |      |  |  | 38,067 | 
|                                              |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|                                              |  |          |  |                                      |  |      | 57,909  |  |      |  | 56,924  |      |  |  | 51,294 | 
|                                              |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 
|                                              |  |          |  |                                      |  |      | 120,162 |  |      |  | 101,853 |      |  |  | 94,361 | 
|                                              |  |          |  |                                      |  |      |         |  |      |  |         |      |  |  |        | 

References:

TJLP  Long Term Interest Rate

FINAME  Financing of Machinery and Equipment (BNDES)





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





At June 30, 2014 amounts due by maturity are as follows:



|              |  |  |         | 
|------------- |  |  | ------- | 
|1 year        |  |  | 62,253  | 
|2 years       |  |  | 13,859  | 
|3 years       |  |  | 11,107  | 
|4 years       |  |  | 8,481   | 
|5 years       |  |  | 9,951   | 
|Above 5 years |  |  | 14,511  | 
|              |  |  |         | 
|              |  |  | 120,162 | 
|              |  |  |         | 

At June 30, 2014, the balance of accrued interest for the period related to the loans and financing
contracts amounted to R$4,542 and R$3,568, classified under current and noncurrent liabilities, respectively.

All loans and financing
contracts above are in reais and have specific terms and conditions defined in the respective contracts with the governmental development agencies that directly or indirectly grant those loans. At June 30, 2014 and 2013 the Companys
financing had no financial covenants, only operational ones, under which the Company is not in default.

Operational covenants

At the date of presentation of the financial statements, as of June 30, 2014 and 2013, the Company did not fail to fulfill the
operational covenants set forth in loan agreements.

The main covenants are as follows:



| |  |  | Fail to fulfill any obligation established in the credit instruments executed with the BANK;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | Suspend its activities for more than thirty days;
| | - |  | -------------------------------------------------



| |  |  | Be prevented, according to the Brazilian Central Bank regulation, from participating in credit operations, including as joint-liable;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Not to reinforce the credits guarantees immediately after notice from the BANK in this sense, if any fact determining the decrease or depreciation of such guarantees occurs;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | request corporate restructuring, or declare its bankruptcy, or request liquidation or intervention, as well as replace any member of its management by another who, at the BANKS discretion, is not recommendable for
the position;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | save, sell, lease, grant, transfer in any manner on behalf of third parties, or remove the assets backing the credits, under any argument and to wherever it is;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

Contracting loans

The
Company contracted guarantee from Banco Itaú, in the amount of R$1,135, provided as guarantee for the rental of the São Paulo office with maturity on July 31, 2014.

On July 22, 2013, Jaborandi Ltda. contracted a R$16,993 loan from Banco do Nordeste to finance the cost of crop, with the first amount
released on September 2, 2013, amounting to R$13,686, at an interest rate of 7.23% with maturity on July 29, 2014.

On
July 29, 2013, the Company contracted a R$32,397 loan from Banco do Nordeste to finance the cost of crop, with the first amount released on October 4, 2013, amounting to R$9,880, at an interest rate of 10.69%, and R$16,034, at an interest
rate of 7.23%. The second tranche of R$ 2,622 was released on February 6, 2014 at an interest rate of 7.23%.All of them maturing on July 29, 2014.

On October 1, 2013, Jaborandi Agrícola Ltda. contracted a R$29,633 loan from BNDES, FINEM financing for the opening of area at
Jatobá farm, with the first portion of R$ 14,500 released on February 11, 2014 with interest rate varying between SELIC and TJLP + 4.45%, maturing on October 15, 2020.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Payment of loans and financing

On July 22, 2013, the Company settled the financing contract entered into with Banco do Nordeste  BNB to finance the cost of crops
of Jatobá farm in the amount of R$11,547. On September 20, 2013, the Company paid the financing contract from Banco Itaú in the amount of R$1,669. On September 30, 2013 the Company paid R$427 related to the financing of
machinery, R$2,081 related to the finance of cost of crops/sugarcane, R$4,735 related to the financing for opening of Jatobá farm.

On October 15, 2013, the amount of R$1,515 related to the portion of two contracts for Financing of Sugarcane Crops was paid to Banco
Itaú. In the quarter, the amount of R$342 related to the Financing of Machinery was paid to Banks HSBC, Itaú and Votorantim.

On October 3, 2013, the Company settled the financing contract (FNE) entered into with Banco do Nordeste  BNB to finance the cost
of crops in the amount of R$7,904. On October 28, 2013, the Company paid to Banco do Nordeste the portion of financing of Property, plant and equipment in the amount of R$3,080. On November 25, 2013 the Company settled the financing
contract entered into with Banco Itaú to finance the crops of soybean in the amount of R$10,875.

In the period corresponding to
the third quarter of 2014, the Company paid financing of machinery to Banks Itaú, HSBC and Votorantim in the amount of R$1,200.

On
May 31, 2014, the Company paid to Banco Itaú the first installment of the financing for planting of sugarcane in the amount of R$ 361. On April 15, 2014, the interest for the FINEM financing from BNDES was paid in the amount of R$
240. In the period corresponding to the third quarter of 2014, the Company paid financing of machinery to Banks Itaú, HSBC and Votorantim in the amount of R$345.

Changes in loans and financing



|                     |  |              |         |  
|-------------------- |  | ------------ | ------- | -
|                     |  | Consolidated |        
|At June 30, 2013     |  |              | 101,853 |  
|                     |  |              |         |  
|New loans            |  |              | 56,723  |  
|Payment of principal |  |              | (44,100 | )
|Payment of interest  |  |              | (2,224  | )
|Interest             |  |              | 7,910   |  
|                     |  |              |         |  
|At June 30, 2014     |  |              | 120,162 |  
|                     |  |              |         |  

Guarantees

The financing of cost of crop for the 13-14 harvest and the current harvest are guaranteed by Jatobá farm mortgage (Jaborandi 
BA) and the financing for the opening of area and financing respectively of Cremaq and Jaborandi farms from BNB and the mortgage of areas of Cremaq farm.

BNB financing require the maintenance of deposits in liquidity funds in accounts remunerated by CDI. The balances at June 30, 2014 and
2013 are disclosed in Note 12.

For FINAME contracts, the financed machinery and equipment were provided as collateral. These are all held
as chattel mortgage until the final settlement of contracts.

FINEM-BNDES financing for opening of Jatobá farm is guaranteed by the
mortgage of Preferência farm.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





20. Taxes payable



|                                           |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------------------------ |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                           |  | 2014 |       |  | 2013 |  |       | 2012 | 
|Tax on Services  ISS payable              |  |      | 91    |  |      |  | 141   |      |  |  | 118   | 
|Withheld social contributions              |  |      | 83    |  |      |  | 131   |      |  |  | 610   | 
|Tax on financial transaction  IOF payable |  |      |      |  |      |  |      |      |  |  | 761   | 
|State VAT  ICMS payable                   |  |      |      |  |      |  | 36    |      |  |  | 22    | 
|Funrural payable                           |  |      | 127   |  |      |  | 417   |      |  |  | 281   | 
|Taxes on sales  Pis and Cofins payable    |  |      | 664   |  |      |  | 18    |      |  |  | 45    | 
|Withholding taxes IRRF payable             |  |      | 9     |  |      |  | 8     |      |  |  |       | 
|Income and social contribution taxes       |  |      | 5,527 |  |      |  | 1,555 |      |  |  | 1,265 | 
|                                           |  |      |       |  |      |  |       |      |  |  |       | 
|Total current                              |  |      | 6,501 |  |      |  | 2,306 |      |  |  | 3,102 | 
|                                           |  |      |       |  |      |  |       |      |  |  |       | 
|Income and social contribution taxes       |  |      | 2,482 |  |      |  | 5,812 |      |  |  | 2,695 | 
|                                           |  |      |       |  |      |  |       |      |  |  |       | 
|Total non-current                          |  |      | 2,482 |  |      |  | 5,812 |      |  |  | 2,695 | 
|                                           |  |      |       |  |      |  |       |      |  |  |       | 

21. Provisions for onerous contracts

The Company recorded provision for onerous contracts in valuable consideration of soybean sale. At June 30, 2014, the
Company recorded provisions for contracts with fixed sales prices lower than the cost of goods, in the amount of R$579.

22. Deferred taxes

Deferred income and social contribution tax assets and liabilities are offset when there is a legal right to offset the
current tax credits against current tax liabilities, and provided that they refer to the same tax authority and the same legal entity.

The fiscal year for income tax and social contribution tax calculation purposes is the year, which differs from the Company financial year for
statutory purposes, which ends June 30 of each year.

The changes in deferred income tax and social contribution tax assets and
liabilities for the periods ended June 30, 2014 and June 30, 2013 and 2012, without taking into consideration offsetting of balances in the same tax jurisdiction, are as follows:



|                                                      |  |      |        |  |      |  |        |      |  |  |        | 
|----------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                      |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Assets                                                |  |      |        |  |      |  |        |      |  |  |        | 
|Non-Current                                           |  |      |        |  |      |  |        |      |  |  |        | 
|Tax loss carryforwards                                |  |      | 54,445 |  |      |  | 36,655 |      |  |  | 20,296 | 
|Biological assets                                     |  |      |       |  |      |  |       |      |  |  | 2,651  | 
|Hedge, contingency and provision for bad debts        |  |      | 10,324 |  |      |  | 10,286 |      |  |  | 10,702 | 
|Provision for onerous                                 |  |      | 197    |  |      |  |       |      |  |  |       | 
|Difference in the cost of farms                       |  |      | 170    |  |      |  | 170    |      |  |  | 171    | 
|                                                      |  |      |        |  |      |  |        |      |  |  |        | 
|                                                      |  |      | 65,136 |  |      |  | 47,111 |      |  |  | 33,820 | 
|Liabilities                                           |  |      |        |  |      |  |        |      |  |  |        | 
|Non-Current                                           |  |      |        |  |      |  |        |      |  |  |        | 
|Biological assets                                     |  |      | 2,889  |  |      |  | 3,676  |      |  |  |       | 
|Derivatives                                           |  |      | 580    |  |      |  | 201    |      |  |  |       | 
|Provision of residual value of PPE assets             |  |      | 1,782  |  |      |  | 851    |      |  |  |       | 
|Accelerated depreciation of assets for rural activity |  |      | 16,331 |  |      |  | 17,167 |      |  |  | 18,860 | 
|                                                      |  |      |        |  |      |  |        |      |  |  |        | 
|                                                      |  |      | 21,582 |  |      |  | 21,895 |      |  |  | 18,860 | 
|                                                      |  |      |        |  |      |  |        |      |  |  |        | 
|Net balance                                           |  |      | 43,554 |  |      |  | 25,216 |      |  |  | 14,960 | 
|                                                      |  |      |        |  |      |  |        |      |  |  |        | 



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The net changes in deferred income and social contribution taxes are as follows:



|                                                                             |  |              |        |  
|---------------------------------------------------------------------------- |  | ------------ | ------ | -
|                                                                             |  | Consolidated |       
|At June 30, 2012                                                             |  |              | 14,960 |  
|                                                                             |  |              |        |  
|Tax loss carryforwards                                                       |  |              | 18,932 |  
|Adjustments in biological assets and agricultural products                   |  |              | (6,327 | )
|Derivatives, contingency, provision for bad debts and residual of PPE assets |  |              | (4,042 | )
|Accelerated depreciation                                                     |  |              | 1,693  |  
|                                                                             |  |              |        |  
|At June 30, 2013                                                             |  |              | 25,216 |  
|                                                                             |  |              |        |  
|Tax loss carryforwards                                                       |  |              | 17,790 |  
|Adjustments in biological assets and agricultural products                   |  |              | 787    |  
|Derivatives, contingency, provision for bad debts and residual of PPE assets |  |              | (1,272 | )
|Onerous contracts                                                            |  |              | 197    |  
|Accelerated depreciation                                                     |  |              | 836    |  
|                                                                             |  |              |        |  
|At June 30, 2014                                                             |  |              | 43,554 |  
|                                                                             |  |              |        |  

The estimated periods of realization of deferred tax assets are as follow:



|     |  |      |        | 
|---- |  | ---- | ------ | 
|     |  | 2014 |       
|2015 |  |      | 14,532 | 
|2016 |  |      | 10,567 | 
|2017 |  |      | 15,153 | 
|2018 |  |      | 8,800  | 
|2019 |  |      | 8,744  | 
|2020 |  |      | 7,340  | 
|     |  |      |        | 
|     |  |      | 65,136 | 
|     |  |      |        | 

Deferred tax assets on income and social contribution tax losses from prior years, with no statute of
limitation and whose offsetting is 100% of annual taxable profit for agricultural activities, limited to 30% of annual taxable profit for other activities, are recognized in books, to the extent it is probable that future taxable profit will be
available for use upon the effective payment and/or realization of the abovementioned additions/exclusions of temporary differences, when they shall be deductible/taxable in the calculation of taxable profit, based on assumptions and conditions
established in the Companys business model.

The carrying amount of deferred tax asset is periodically reviewed and the projections
are annually reviewed. In the event of significant factors that may change the projections, these are reviewed during the year by the Company.

Provisional Executive Order No. 627/13 converted into Law

In November 2013, Provisional Executive Order No. 627 was issued, establishing the non-levy of taxation on profits and dividend calculated
based on P&L assessed from January 1, 2008 to December 31, 2013, by legal entities taxed on taxable profit, profit computed as a percentage of revenue, or profit determined by authorities, effectively paid up to the date of publication
of the mentioned Provisional Executive Order, at amounts exceeding those assessed in compliance with accounting methods and criteria effective as of December 31, 2007, provided that the company which has paid the profits or dividend opted for
the early adoption of the new tax regime as from 2014.

In May 2014, this Provisional Executive Order was converted into Law
No. 12973, with amendments to some provisions, including the treatment of dividend, of interest on equity and of investments evaluation by the equity value. Differently from what was established in the Provisional Executive Order, Law
No. 12973 established the non-levy of taxation, on an unconditional basis, for profits and dividend calculated based on P&L assessed from January 1, 2008 to December 31, 2013.

The Company prepared studies on the effects which might result from the provisions of Law No. 12973, and concluded that there are no
significant effects on its financial statements at June 30, 2014 and December 31, 2013, and is assessing whether it shall opt or not for the early adoption of its effects, which shall be expressed in the Federal Tax Debt and Credit Return
(DCTF) related to the triggering events occurred in the month to be determined by the Brazilian IRS (SRFB).



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##### Table of Contents

Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|23. | Capital
|--- | -------



| | a) | Capital (number of shares)
| | -- | --------------------------



|                                                    |  |      |            |  |      |  |            |      |  |  |            | 
|--------------------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|Shareholder                                         |  | 2014 |            |  | 2013 |  |            | 2012 | 
|Cresud S.A.C.I.F.Y.A.                               |  |      | 23,150,050 |  |      |  | 23,160,450 |      |  |  | 21,153,015 | 
|Elie Horn                                           |  |      |           |  |      |  | 3,274,600  |      |  |  | 3,274,600  | 
|                                                    |  |      |            |  |      |  |            |      |  |  |            | 
|                                                    |  |      | 23,150,050 |  |      |  | 26,435,050 |      |  |  | 24,427,615 | 
|Board of Directors                                  |  |      | 6,840,300  |  |      |  | 7,848,100  |      |  |  | 7,810,000  | 
|Executive Board                                     |  |      | 500        |  |      |  | 500        |      |  |  | 500        | 
|                                                    |  |      |            |  |      |  |            |      |  |  |            | 
|Officers                                            |  |      | 6,840,800  |  |      |  | 7,848,600  |      |  |  | 7,810,500  | 
|Treasury                                            |  |      | 195,800    |  |      |  |           |      |  |  |           | 
|Other                                               |  |      | 28,235,750 |  |      |  | 24,138,750 |      |  |  | 26,184,285 | 
|                                                    |  |      |            |  |      |  |            |      |  |  |            | 
|Total shares of paid up capital                     |  |      | 58,422,400 |  |      |  | 58,422,400 |      |  |  | 58,422,400 | 
|                                                    |  |      |            |  |      |  |            |      |  |  |            | 
|Total outstanding shares                            |  |      | 28,235,750 |  |      |  | 24,138,750 |      |  |  | 26,184,285 | 
|                                                    |  |      |            |  |      |  |            |      |  |  |            | 
|Outstanding shares as percentage of total shares(%) |  |      | 48         |  |      |  | 41         |      |  |  | 45         | 

At June 30, 2014 and 2013, the Companys authorized and paid up capital amounted to R$584,224. The
Company is authorized to increase its capital, regardless of the statutory reform, up to the limit of R$3,000,000, upon Board of Directors resolution.



| | b) | Subscription warrants
| | -- | ---------------------

On March 15, 2006, the Board of Directors approved the
issue of 512,000 shares subscription warrants, 256,000 of which for first issue, and 256,000 of which for second issue, which were delivered to the founder shareholders, in proportion to their interest in the Companys capital at the date of
issue of the subscription warrant. Each issue of subscription warrant grants their holders the right to subscribe shares issued by the Company, in an amount equivalent to 20% of its capital after the increase arising from the full exercise of the
subscription warrant of each issue.

Subscription warrants of the first issue grant their holders, as from the dates on which they become
exercisable, the right to subscribe the shares issued by the Company through the payment of the price per share used in the initial public offering, subject to certain restatement and adjustment rules. The subscription warrants of the first. issue
were issued in three series, which differ solely as to the date on which the right to subscribe the shares granted by them start.

The
subscription warrants of the first issue/first series may be exercised as from the closing of the twelfth month as from the issue date and have as object a total of 85,336 subscription warrants. The subscription warrants of the first issue/second
series may be exercised as from the closing of the 24th month as from the issue and have as object a total of 85,332 subscription warrants. The subscription warrants of the first issue/ third series may be exercised as from the closing of the
thirty-sixth month as from the issue and have as object a total of 85,332 subscription warrants.

Exceptionally, the subscription warrants
of the first issue may be exercised by their holders in the event of transfer of the Companys control or acquisition of material participation, as defined in the terms of the corporate documents that decided on the issue of the subscription
warrants. Each set of 1,000 subscription warrants of first issue grants the right to subscription of 1 (one) share issued by the Company upon its attribution (100 shares after the split approved in October 2007).



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The subscription warrants of the second issue grant the holders the right to subscribe shares issued by the Company for up to 15 years, from
the date of publication of the announcement of closing of the initial public offering of shares and solely in the events of transfer or acquisition of material shareholding control in the Company, as defined in the terms of the corporate document
that decided on the issue of the subscription warrants. In such events, public offerings for acquisition of all the outstanding shares of the Company shall be presented. For the subscription of shares object of the subscription warrants of second
issue, their holders shall be required to pay the same price per share used in the abovementioned public offerings of acquisition of the Companys shares. Each set of 1,000 subscription warrants of second issue grants the right to the
subscription of 1 (one) share issued by the Company upon its attribution (100 shares after the split approved in October 2007).

The
number of shares to be subscribed according to the subscription warrants shall be adjusted in case of split or reverse split of shares.

The detailed information of the first issue market value of these subscription warrants is shown in the table below:



|                                                                                            |  |               |           |  |      |  |           |      |  |  |           | 
|------------------------------------------------------------------------------------------- |  | ------------- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                                                                                            |  | First tranche |          
|Brasilagro                                                                                  |  | 2014          |           |  | 2013 |  |           | 2012 | 
|Price of share                                                                              |  |               | 9.60      |  |      |  | 11.07     |      |  |  | 7.45      | 
|Issue date (day/month/year)                                                                 |  |               | 28/4/2006 |  |      |  | 28/4/2006 |      |  |  | 28/4/2006 | 
|Maturity date (day/month/year)                                                              |  |               | 27/4/2021 |  |      |  | 27/4/2021 |      |  |  | 27/4/2021 | 
|Exercise price at year endR$/share                                                         |  |               | 15.36     |  |      |  | 14,42     |      |  |  | 13,51     | 
|Number of outstanding shares (000 shares)                                                  |  |               | 58,422    |  |      |  | 58,422    |      |  |  | 58,422    | 
|Percentage limit of capital shares to be issued upon exercise (percentage of new capital)% |  |               | 20        |  |      |  | 20        |      |  |  | 20        | 
|Number of shares to be issued upon exercise (000 shares)                                   |  |               | 14,606    |  |      |  | 14,606    |      |  |  | 14,606    | 
|Number of outstanding warrants (000 bonus)                                                 |  |               | 256,000   |  |      |  | 256,000   |      |  |  | 256,000   | 

The outstanding subscription warrants of second issue at June 30, 2014 and June 30, 2013 are
256,000, and there were no changes in the number of outstanding subscription warrants for the years ended June 30, 2014 and 2013. The subscription warrants of second issue grant their holders the right to subscribe shares issued by the Company,
in the amount equivalent to 20% of its capital, after the increase arising from the full exercise of the subscription warrants of second issue.



| | b.1) | Warrants of First issue
| | ---- | -----------------------

Since the subscription warrants of first tranche are recorded under
IFRS 2 and may be fully exercised since March 15, 2009, which precedes the transition date to IFRS, i.e., July 1, 2009, and the Company has not disclosed the fair value of the subscription warrants on their assessment date, the
subscription warrants are not recorded in the financial statements.



| | b.2) | Warrants of Second issue
| | ---- | ------------------------

Management believes that the subscription warrants of second issue
(which may only be exercised if the control is transferred or if significant interest is acquired) have no significant fair value in any of the periods presented, because the exercise price shall be equivalent to the price per share used in the
public offering for acquisition of shares formulated on account of obtaining the control or acquiring significant interest in the Company.



| | c) | Stock option plan  stock option
| | -- | --------------------------------

The information on the stock option plan and
issuance of new grants are described in Note 27.



| | d) | Gain on bargain purchase  Cresca
| | -- | ---------------------------------

On December 12, 2013, the Company acquired
interest in a joint venture (Note 14) and it was recognized a gain on bargain purchase in equity in the amount of R$18,658 for being a transaction with shareholder.



| | e) | Legal reserve and retained profits reserve
| | -- | ------------------------------------------

Pursuant to article 193 of Law
No. 6404/76, 5% (five per cent) of the Companys net income computed at the end of each year must, before any other allocation, be invested in the set-up of a legal reserve, which shall not exceed 20% (twenty per cent) of capital.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The Company is allowed not to set up the legal reserve for the financial year in which the reserve balance, plus the amount of capital reserve
addressed in item 1, of article 182, of Law No. 6404/76, exceeds 30% (thirty per cent) of capital. The legal reserve aims at assuring the integrity of the Companys capital and may only be used to offset loss and increase capital.

According to article 36, item (c), of the Companys articles of incorporation and article 196 of Law No. 6404/76, the Company may
allocate the remaining portion of adjusted net income for the year ended, to reserve for investment and expansion.

The balance of the
retained profits reserve, except for the reserves of unrealized profit and reserves for contingencies, may not exceed the amount of capital. Once this maximum limit is reached, the General Meeting may resolve on the investment of the exceeding
portion in the payment, increase of capital or in dividend distribution.



| | f) | Dividends
| | -- | ---------

Pursuant to article 36, of the Companys article of incorporation, the
profit accrued for the year shall be allocated as follows: (a) 5% (five per cent) of net income for the set-up of legal reserve, up to the limit of 20% (twenty per cent) of capital; (b) 75% (twenty five per cent) of the adjusted net
income, after the deduction of item (a) above, shall be allocated to the payment of mandatory dividend and (iii) 25% (twenty five per cent) of the adjusted net income, after the deduction of item (b) above, shall be allocated to the
reserve for investment and expansion.

On October 29, 2013, the Board of Directors approved total payment of dividend for the year
ended June 30, 2013 in the amount of R$5,883, paid on January 10, 2014.



| | g) | Other Reserve
| | -- | -------------

Refers in the amount of R$4,653 and R$1,132 arising from the purchase of
interest of investments in the subsidiaries Jaborandi S.A. and Jaborandi Ltda, recorded in equity as Other reserve.

At
June 30, 2014, R$3,335 was recorded relating to the effects of variation of the foreign exchange rate resulting from the translation of Crescas financial statements.



| | h) | Treasury shares
| | -- | ---------------



|                 |  |                 |         |  |         |  |       |             |  |  |       | 
|---------------- |  | --------------- | ------- |  | ------- |  | ----- | ----------- |  |  | ----- | 
|                 |  | Numberof shares |         |  | Cost/R$ |  |       | Marketvalue | 
|At June 30, 2014 |  |                 | 195,800 |  |         |  | 1,934 |             |  |  | 1,880 | 

This reserve represents the equity component of common shares.

On September 2, 2013, the Company approved the repurchase program of common shares issued up to the limit of 3,511,130 common shares, not
exceeding the balance of profits reserve available, included in the Companys balance sheet at June 30, 2013. During the year ended June 30, 2014, Brasilagro acquired 195,800 common shares issued, which accounts for 0.34% of
outstanding shares, excluding the controlling shareholders.



|24. | Segment information
|--- | -------------------

The segment information is based on information used by Brasilagro
management to assess the performance of the operating segments, as well as making decisions related to the investment of funds. The Company has 3 segments: (i) grains, (ii) sugarcane and (iii) real estate. The operating assets related
to these segments are located only in Brazil.

The Grains segments main activity is the production and sale of the following products:
soybean and corn.

The Sugarcane segment includes the sale of the product in natura.

The Real Estate segment presents the P&L from operations carried out in the Companys subsidiaries.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The selected P&L and assets information by segment, which were measured in accordance with the same accounting practices used in the
preparation of the financial statements, are as follows:



|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|-------------------------------------------------------------------------------------------------- |  | ----- | -------- | - | ---------- |  | ------- | --------------------- |  |  | --------- | - |  | ----- | ------- | - | ------------ |  | ------ | --------------------- |  |  | ---------- | - |  | ------ | -------- | - | --------- |  | ------- | ----- |  |  | ------------ | - |  |  | ------- | - |  |  | ------ | - |  |  | ------- | -
|                                                                                                   |  | 2014  |          |   | 2013       | 
|                                                                                                   |  |       |          |   |            |  |         | Agricultural activity |  |  |           |   |  |       |         |   |              |  |        | Agricultural activity |  |  |            |  
|                                                                                                   |  | Total |          |   | Realestate |  |         | Grains                |  |  | Sugarcane |   |  | Other |         |   | Notallocated |  |        | Total                 |  |  | Realestate |   |  | Grains |          |   | Sugarcane |  |         | Other |  |  | Notallocated |  
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Net revenue                                                                                        |  |       | 131,314  |   |            |  |         |                       |  |  | 91,645    |   |  |       | 38,235  |   |              |  | 1,434  |                       |  |  |           |   |  |        | 185,647  |   |           |  |        |       |  |  | 123,237      |   |  |  | 61,022  |   |  |  | 1,388  |   |  |  |        |  
|Gain on sale of farm                                                                               |  |       | 21,845   |   |            |  | 21,845  |                       |  |  |          |   |  |       |        |   |              |  |       |                       |  |  |           |   |  |        | 54,815   |   |           |  | 54,815  |       |  |  |             |   |  |  |        |   |  |  |       |   |  |  |         |  
|Change in fair value of biological assets and agricultural products                                |  |       | 1,092    |   |            |  |        |                       |  |  | 2,059     |   |  |       | (719    | ) |              |  | (248   | )                     |  |  |            |   |  |        | 2,289    |   |           |  |        |       |  |  | (22,681      | ) |  |  | 25,060  |   |  |  | (90    | ) |  |  |        |  
|(Impairment) Reversal of impairment of net realizable value of agricultural products after harvest |  |       | (2,043   | ) |            |  |        |                       |  |  | (2,040    | ) |  |       |        |   |              |  | (3     | )                     |  |  |           |   |  |        | 1,659    |   |           |  |        |       |  |  | 1,659        |   |  |  |        |   |  |  |       |   |  |  |        |  
|Cost of sales                                                                                      |  |       | (138,535 | ) |            |  |        |                       |  |  | (98,529   | ) |  |       | (34,790 | ) |              |  | (5,216 | )                     |  |  |           |   |  |        | (170,643 | ) |           |  |        |       |  |  | (105,401     | ) |  |  | (61,157 | ) |  |  | (4,085 | ) |  |  |        |  
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Gross profit (loss)                                                                                |  |       | 13,673   |   |            |  | 21,845  |                       |  |  | (6,865    | ) |  |       | 2,726   |   |              |  | (4,033 | )                     |  |  |           |   |  |        | 73,767   |   |           |  | 54,815  |       |  |  | (3,186       | ) |  |  | 24,925  |   |  |  | (2,787 | ) |  |  |        |  
|Operating income (expenses)                                                                        |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Selling expenses                                                                                   |  |       | (10,239  | ) |            |  | (2,430  | )                     |  |  | (7,283    | ) |  |       |        |   |              |  | (526   | )                     |  |  |           |   |  |        | (14,028  | ) |           |  | (4,294  | )     |  |  | (9,790       | ) |  |  | (68     | ) |  |  | 124    |   |  |  |        |  
|General and administrative                                                                         |  |       | (30,378  | ) |            |  |        |                       |  |  |          |   |  |       |        |   |              |  |       |                       |  |  | (30,378    | ) |  |        | (29,233  | ) |           |  |        |       |  |  |             |   |  |  |        |   |  |  |       |   |  |  | (29,233 | )
|Other operating revenue                                                                            |  |       | 286      |   |            |  |        |                       |  |  |          |   |  |       |        |   |              |  |       |                       |  |  | 286        |   |  |        | (3,539   | ) |           |  |        |       |  |  |             |   |  |  |        |   |  |  |       |   |  |  | (3,539  | )
|Equity pick up                                                                                     |  |       | (705     | ) |            |  |        |                       |  |  |          |   |  |       |        |   |              |  |       |                       |  |  | (705       | ) |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Operating income (expenses)                                                                        |  |       | (27,363  | ) |            |  | 19,415  |                       |  |  | (14,148   | ) |  |       | 2,726   |   |              |  | (4,559 | )                     |  |  | (30,797    | ) |  |        | 26,967   |   |           |  | 50,521  |       |  |  | (12,976      | ) |  |  | 24,857  |   |  |  | (2,663 | ) |  |  | (32,772 | )
|Net financial income                                                                               |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Financial income                                                                                   |  |       | 40,051   |   |            |  | 714     |                       |  |  | 8,556     |   |  |       |        |   |              |  |       |                       |  |  | 30,781     |   |  |        | 38,000   |   |           |  | 148     |       |  |  | 14,656       |   |  |  |        |   |  |  |       |   |  |  | 23,196  |  
|Financial expenses                                                                                 |  |       | (41,611  | ) |            |  | (3,439  | )                     |  |  | (5,009    | ) |  |       |        |   |              |  |       |                       |  |  | (33,163    | ) |  |        | (38,591  | ) |           |  | (17     | )     |  |  | (19,856      | ) |  |  |        |   |  |  |       |   |  |  | (18,718 | )
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Profit/loss before taxation                                                                        |  |       | (28,923  | ) |            |  | 16,690  |                       |  |  | (10,601   | ) |  |       | 2,726   |   |              |  | (4,559 | )                     |  |  | (33,179    | ) |  |        | 26,376   |   |           |  | 50,652  |       |  |  | (18,176      | ) |  |  | 24,857  |   |  |  | (2,663 | ) |  |  | (28,294 | )
|Income tax and social contribution (i)                                                             |  |       | 15,561   |   |            |  | (5.674  | )                     |  |  | 3,604     |   |  |       | (927    | ) |              |  | 1,550  |                       |  |  | 17.008     |   |  |        | 2,351    |   |           |  | (17,222 | )     |  |  | 6,180        |   |  |  | (8,451  | ) |  |  | 905    |   |  |  | 20,939  |  
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|                                                                                                   |  |       | (13,362  | ) |            |  | 11.016  |                       |  |  | (6,997    | ) |  |       | 1,799   |   |              |  | (3,009 | )                     |  |  | (16.171    | ) |  |        | 28,727   |   |           |  | 33,430  |       |  |  | (11,996      | ) |  |  | 16,406  |   |  |  | (1,758 | ) |  |  | (7,355  | )
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|Profit (loss) for the year                                                                         |  |       | (13,362  | ) |            |  | 11.016  |                       |  |  | (6,997    | ) |  |       | 1,799   |   |              |  | (3,009 | )                     |  |  | (16.171    | ) |  |        | 28,727   |   |           |  | 33,430  |       |  |  | (11,996      | ) |  |  | 16,406  |   |  |  | (1,758 | ) |  |  | (7,355  | )
|                                                                                                   |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |                       |  |  |            |   |  |        |          |   |           |  |         |       |  |  |              |   |  |  |         |   |  |  |        |   |  |  |         |  
|                                                                                                   |  |       |         
|Total assets                                                                                       |  |       | 828,382  |   |            |  | 402,555 |                       |  |  | 55,939    |   |  |       | 38,625  |   |              |  | 2,288  |                       |  |  | 328,975    |   |  |        | 770,830  |   |           |  | 472,838 |       |  |  | 112,974      |   |  |  | 47,930  |   |  |  |       |   |  |  | 137,088 |  
|Total liabilities                                                                                  |  |       | 244,476  |   |            |  | 112,805 |                       |  |  | 46,901    |   |  |       | 2,985   |   |              |  |       |                       |  |  | 81,785     |   |  |        | 183,845  |   |           |  | 101,363 |       |  |  | 31,403       |   |  |  | 7,804   |   |  |  |       |   |  |  | 43,275  |  



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|------------------------------------------------------------------- |  | ----- | -------- | - | ---------- |  | ------- | --------------------- |  |  | --------- | - |  | ----- | ------- | - | ------------ |  | ------ | - |  |  | ------- | -
|                                                                    |  | 2012  |         
|                                                                    |  |       |          |   |            |  |         | Agricultural activity |  |  |           |  
|                                                                    |  | Total |          |   | Realestate |  |         | Grains                |  |  | Sugarcane |   |  | Other |         |   | Notallocated | 
|Net revenue                                                         |  |       | 146,218  |   |            |  |        |                       |  |  | 105,874   |   |  |       | 40,183  |   |              |  | 161    |   |  |  |        |  
|Gain on sale of farm                                                |  |       | 12,987   |   |            |  | 12,987  |                       |  |  |          |   |  |       |        |   |              |  |       |   |  |  |         |  
|Change in fair value of biological assets and agricultural products |  |       | (417     | ) |            |  |        |                       |  |  | (3,106    | ) |  |       | 2,689   |   |              |  |       |   |  |  |        |  
|Reversal of provision of agricultural products after harvest        |  |       | (2,663   | ) |            |  |        |                       |  |  | (2,429    | ) |  |       | (234    | ) |              |  |       |   |  |  |        |  
|Cost of sales                                                       |  |       | (136,447 | ) |            |  |        |                       |  |  | (97,970   | ) |  |       | (37,150 | ) |              |  | (1,327 | ) |  |  |        |  
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Gross profit (loss)                                                 |  |       | 19,678   |   |            |  | 12,987  |                       |  |  | 2,369     |   |  |       | 5,488   |   |              |  | (1,166 | ) |  |  |        |  
|Operating revenue (expenses)                                        |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Selling expenses                                                    |  |       | (4,015   | ) |            |  | (392    | )                     |  |  | (3,623    | ) |  |       |        |   |              |  |       |   |  |  |        |  
|General and administrative                                          |  |       | (28,892  | ) |            |  |        |                       |  |  |          |   |  |       |        |   |              |  |       |   |  |  | (28,892 | )
|Other operating revenue                                             |  |       | 10       |   |            |  |        |                       |  |  |          |   |  |       |        |   |              |  |       |   |  |  | 10      |  
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Operating results                                                   |  |       | (13,219  | ) |            |  | 12,595  |                       |  |  | (1,254    | ) |  |       | 5,488   |   |              |  | (1,166 | ) |  |  | (28,882 | )
|Net financial income                                                |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Financial income                                                    |  |       | 38,073   |   |            |  | 428     |                       |  |  |          |   |  |       |        |   |              |  |       |   |  |  | 37,645  |  
|Financial expenses                                                  |  |       | (44,299  | ) |            |  | (97     | )                     |  |  | (16,639   | ) |  |       |        |   |              |  |       |   |  |  | (27,563 | )
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Profit/loss before taxation                                         |  |       | (19,445  | ) |            |  | 12,926  |                       |  |  | (17,893   | ) |  |       | 5,488   |   |              |  | (1,166 | ) |  |  | (18,800 | )
|Income tax and social contribution (i)                              |  |       | 12,845   |   |            |  | (4,395  | )                     |  |  | 6,084     |   |  |       | (1,866  | ) |              |  | 397    |   |  |  | 12,625  |  
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|                                                                    |  |       | (6,600   | ) |            |  | 8,531   |                       |  |  | (11,809   | ) |  |       | 3,622   |   |              |  | (769   | ) |  |  | (6,175  | )
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|Profit (loss) for the year                                          |  |       | (6,600   | ) |            |  | 8,531   |                       |  |  | (11,809   | ) |  |       | 3,622   |   |              |  | (769   | ) |  |  | (9,766  | )
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   |              |  |        |   |  |  |         |  
|                                                                    |  |       |          |   |            |  |         |                       |  |  |           |   |  |       |         |   | 2012         | 
|Total assets                                                        |  |       | 735,762  |   |            |  | 402,037 |                       |  |  | 78,604    |   |  |       | 37,376  |   |              |  |       |   |  |  | 217,745 |  
|Total liabilities                                                   |  |       | 176,794  |   |            |  | 40,858  |                       |  |  |          |   |  |       |        |   |              |  |       |   |  |  | 135,936 |  



| | (i) | The income and social contribution taxes of the real estate refer to the receipts from the sale of farm and leases.
| | --- | -------------------------------------------------------------------------------------------------------------------

The balance sheet accounts are represented by Trade accounts receivables, Biological assets, Inventories of
agricultural products and Investment properties.



|25. | Revenues
|--- | --------



|                        |  |      |         |   |      |  |         |      |  |  |         |  
|----------------------- |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                        |  | 2014 |         |   | 2013 |  |         | 2012 | 
|Sales of grains         |  |      | 95,896  |   |      |  | 128,941 |      |  |  | 112,408 |  
|Sales of sugarcane      |  |      | 39,406  |   |      |  | 62,583  |      |  |  | 41,260  |  
|Lease                   |  |      | 1,143   |   |      |  | 1,261   |      |  |  | 513     |  
|Other revenue           |  |      | 1,730   |   |      |  | 1,253   |      |  |  | 359     |  
|                        |  |      |         |   |      |  |         |      |  |  |         |  
|Gross operating revenue |  |      | 138,175 |   |      |  | 194,038 |      |  |  | 154,540 |  
|                        |  |      |         |   |      |  |         |      |  |  |         |  
|Sales deductions        |  |      |         |   |      |  |         |      |  |  |         |  
|Taxes on sales          |  |      | (6,861  | ) |      |  | (8,391  | )    |  |  | (8,322  | )
|                        |  |      |         |   |      |  |         |      |  |  |         |  
|                        |  |      | (6,861  | ) |      |  | (8,391  | )    |  |  | (8,322  | )
|                        |  |      |         |   |      |  |         |      |  |  |         |  
|Net revenue             |  |      | 131,314 |   |      |  | 185,647 |      |  |  | 146,218 |  
|                        |  |      |         |   |      |  |         |      |  |  |         |  



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|26. | Expenses by nature
|--- | ------------------



|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|-------------------------------------- |  | ------------------- | ------- |  | --------------- |  | ------ | ------------------------- |  |  | ------ |  |  |  | ------- | -
|                                       |  | Cost ofproductssold |         |  | Sellingexpenses |  |        | General andadministrative |  |  | Total  | 
|Depreciation and amortization          |  |                     | 26,271  |  |                 |  |       |                           |  |  | 1,127  |  |  |  | 27,398  |  
|Personnel expenses                     |  |                     | 5,392   |  |                 |  |       |                           |  |  | 15,832 |  |  |  | 21,224  |  
|Expenses with services provider        |  |                     | 26,235  |  |                 |  |       |                           |  |  | 5,328  |  |  |  | 31,563  |  
|Lease                                  |  |                     | 303     |  |                 |  |       |                           |  |  |       |  |  |  | 303     |  
|Cost of agricultural products          |  |                     | 76,367  |  |                 |  |       |                           |  |  |       |  |  |  | 76,367  |  
|Freight and storage                    |  |                     |        |  |                 |  | 3,063  |                           |  |  |       |  |  |  | 3,063   |  
|Maintenance, travel expenses and other |  |                     | 1,879   |  |                 |  | 952    |                           |  |  | 6,605  |  |  |  | 8,484   |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|At June 30, 2012                       |  |                     | 136,447 |  |                 |  | 4,015  |                           |  |  | 28,892 |  |  |  | 169,354 |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|Depreciation and amortization          |  |                     | 26,702  |  |                 |  |       |                           |  |  | 1,295  |  |  |  | 27,997  |  
|Personnel expenses                     |  |                     | 7,652   |  |                 |  |       |                           |  |  | 17,971 |  |  |  | 25,623  |  
|Expenses with services provider        |  |                     | 50,441  |  |                 |  |       |                           |  |  | 5,436  |  |  |  | 55,877  |  
|Lease                                  |  |                     |        |  |                 |  |       |                           |  |  | 648    |  |  |  | 648     |  
|Cost of agricultural products          |  |                     | 82,227  |  |                 |  |       |                           |  |  |       |  |  |  | 82,227  |  
|Freight and storage                    |  |                     |        |  |                 |  | 8,888  |                           |  |  |       |  |  |  | 8,888   |  
|Allowance for doubtful accounts        |  |                     |        |  |                 |  | 846    |                           |  |  |       |  |  |  | 846     |  
|Sale of farmcommission                |  |                     |        |  |                 |  | 4,294  |                           |  |  |       |  |  |  | 4,294   |  
|Maintenance, travel expenses and other |  |                     | 3,621   |  |                 |  |       |                           |  |  | 3,883  |  |  |  | 7,504   |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|At June 30, 2013                       |  |                     | 170,643 |  |                 |  | 14,028 |                           |  |  | 29,233 |  |  |  | 213,904 |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|Depreciation and amortization          |  |                     | 20,313  |  |                 |  |       |                           |  |  | 1,118  |  |  |  | 21,431  |  
|Personnel expenses                     |  |                     | 6,377   |  |                 |  |       |                           |  |  | 19,589 |  |  |  | 25,966  |  
|Expenses with services provider        |  |                     | 37,150  |  |                 |  |       |                           |  |  | 4,841  |  |  |  | 41,991  |  
|Leasing                                |  |                     | 4,363   |  |                 |  | 982    |                           |  |  | 698    |  |  |  | 6,043   |  
|Cost of agricultural products          |  |                     | 66,721  |  |                 |  |       |                           |  |  |       |  |  |  | 66,721  |  
|Freight and storage                    |  |                     |        |  |                 |  | 7,793  |                           |  |  |       |  |  |  | 7,793   |  
|Allowance for doubtful accounts        |  |                     |        |  |                 |  | (525   | )                         |  |  |       |  |  |  | (525    | )
|Contracts onerous                      |  |                     |        |  |                 |  | 579    |                           |  |  |       |  |  |  | 579     |  
|Sale of farmcommission                |  |                     |        |  |                 |  | 1,410  |                           |  |  |       |  |  |  | 1,410   |  
|Maintenance, travel expenses and other |  |                     | 3,611   |  |                 |  |       |                           |  |  | 4,132  |  |  |  | 7,743   |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  
|At June 30, 2014                       |  |                     | 138,535 |  |                 |  | 10,239 |                           |  |  | 30,378 |  |  |  | 179,152 |  
|                                       |  |                     |         |  |                 |  |        |                           |  |  |        |  |  |  |         |  



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|27. | Management compensation
|--- | -----------------------

The expenses associated with Management compensation were
recorded under General and administrative expenses and are as follows:



|                                                    |  |      |       |  |      |  |       |      |  |  |       | 
|--------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                    |  | 2014 |       |  | 2013 |  |       | 2012 | 
|Board of directors and executive board compensation |  |      | 3,622 |  |      |  | 3,435 |      |  |  | 3,267 | 
|Bonus                                               |  |      | 4,924 |  |      |  | 4,782 |      |  |  | 4,282 | 
|                                                    |  |      |       |  |      |  |       |      |  |  |       | 
|Global compensation                                 |  |      | 8,546 |  |      |  | 8,217 |      |  |  | 7,549 | 
|Grant of shares                                     |  |      | 816   |  |      |  | 1,261 |      |  |  | 1,138 | 
|                                                    |  |      |       |  |      |  |       |      |  |  |       | 
|                                                    |  |      | 9,362 |  |      |  | 9,466 |      |  |  | 8,688 | 
|                                                    |  |      |       |  |      |  |       |      |  |  |       | 

The global compensation of the Companys officers and members of the Board of Directors, for the year
ending June 30, 2014 in the amount of R$ 9,362, was approved at the Annual General Meeting held on October 29, 2013.

Stock
option planstock options

On August 11, 2010, the Board of Directors approved the creation of the Stock Option Program
authorizing the Companys executive board to grant stock options to the elected beneficiaries at that time. In the Program, the beneficiaries, the number of shares that each one may acquire upon exercise of the options, the exercise price per
share to be paid in cash by the beneficiaries and the conditions of options were established. Each option, when exercised, entitles the beneficiary to purchase one share of the Company for the exercise price established in the Program. The Programs
comprise five beneficiaries and grants 370,007 options at an exercise price of R$8.97 per share, and may be exercised in full as from August 12, 2012 (vesting date), respectively; valid for five years as from the granting date.

On July 03, 2012 the Board of Directors approved the second grant of stock options to the elected beneficiaries in the first grant. The
Programs comprise five beneficiaries and grants 315,479 options at an exercise price of R$8.25 per share and may be exercised in full from July 03, 2012 (vesting date), respectively through a period of 5 years from the granting date.

On September 4, 2012 the Board of Directors approved the third grant of stock options to the elected beneficiaries in the first grant.
The Programs comprise five beneficiaries and grants 315,479 options at an exercise price of R$8.52 per share, and may be exercised in full as from September 4, 2014 (vesting date), respectively; valid for 5 years as from the granting date.

The stock options to be granted according to the Plan may grant rights on the number of shares which does not exceed, at any time, the maximum
and cumulative amount of 2% of shares issued by the Company, respecting the minimum price of the average quotation of the Companys shares at São Paulo Stock Exchange (BOVESPA) floor, weighted by the volume of trading during the last
thirty floors prior to the option grant.

The table below presents the changes in the stock option plan per granting:



|                                      |  |            |         |   |             |  |         |            |  |  |         |   |  |  |           |  
|------------------------------------- |  | ---------- | ------- | - | ----------- |  | ------- | ---------- |  |  | ------- | - |  |  | --------- | -
|                                      |  | Firstgrant |         |   | Secondgrant |  |         | Thirdgrant |  |  | Total   |  
|Outstanding on July 1, 2013           |  |            | 370,007 |   |             |  | 315,479 |            |  |  | 315,479 |   |  |  | 1,000,965 |  
|Cancelled                             |  |            |        |   |             |  | (54,527 | )          |  |  | (54,527 | ) |  |  | (109,054  | )
|Expired                               |  |            | (68,159 | ) |             |  |        |            |  |  |        |   |  |  | (68,159   | )
|                                      |  |            |         |   |             |  |         |            |  |  |         |   |  |  |           |  
|Outstanding at June 30, 2014          |  |            | 301,848 |   |             |  | 260,952 |            |  |  | 260,952 |   |  |  | 823,752   |  
|                                      |  |            |         |   |             |  |         |            |  |  |         |   |  |  |           |  
|Exercisable at June 30, 2014 (vested) |  |            | 301,848 |   |             |  |        |            |  |  |        |   |  |  | 301,848   |  



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The table below presents the information on the Program and assumptions used for valuation:



|                                                  |  |             |            |  |              |  |           |             |  |  |            | 
|------------------------------------------------- |  | ----------- | ---------- |  | ------------ |  | --------- | ----------- |  |  | ---------- | 
|                                                  |  | First grant |            |  | Second grant |  |           | Third grant | 
|Date of issuance                                  |  |             | 11/08/2010 |  |              |  | 03/7/2012 |             |  |  | 04/09/2012 | 
|Exercise price (R$/share)                         |  |             | 8.97       |  |              |  | 8.25      |             |  |  | 8.52       | 
|Quoted market price on grant date (R$/share)      |  |             | 9.60       |  |              |  | 7.69      |             |  |  | 8.50       | 
|Quoted market price at end of year                |  |             | 8.78       |  |              |  | 8.78      |             |  |  | 8.78       | 
|Free risk interest rate %                         |  |             | 11.36      |  |              |  | 9.37      |             |  |  | 9.12       | 
|Contractual period for exercise                   |  |             | 5 years    |  |              |  | 5 years   |             |  |  | 5 years    | 
|Expected dividend yield %                         |  |             | 1.00       |  |              |  | 0.50      |             |  |  | 0.50       | 
|Volatility of shares in the market  %            |  |             | 67.48      |  |              |  | 41.62     |             |  |  | 40.50      | 
|Number of outstanding options                     |  |             | 301,848    |  |              |  | 260,952   |             |  |  | 260,952    | 
|Number of options to be exercised                 |  |             | 301,848    |  |              |  | 260,952   |             |  |  | 260,952    | 
|Estimated fair value on the grant date (R$/share) |  |             | 6.16       |  |              |  | 3.60      |             |  |  | 4.08       | 

In the year ended June 30, 2014 the Company recognized the amount of R$816 (R$1,251 at June 30,2013)
recorded in administrative expenses. There was a reversal of R$350 related to the cancelled options, due to the resignation of one of the Companys directors.



|28. | Financial income and expenses
|--- | -----------------------------



|                                                                       |  |      |         |   |      |  |         |      |  |  |         |  
|---------------------------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                                       |  | 2014 |         |   | 2013 |  |         | 2012 | 
|Financial Income                                                       |  |      |         |   |      |  |         |      |  |  |         |  
|Interest short term investments                                        |  |      | 9,484   |   |      |  | 5,598   |      |  |  | 12,686  |  
|Interest on receivables                                                |  |      | 2,635   |   |      |  | 11,029  |      |  |  | 1,812   |  
|Variation                                                              |  |      |        |   |      |  |        |      |  |  | 1,939   |  
|Foreign exchange variation                                             |  |      | 6,011   |   |      |  | 5,116   |      |  |  | 2,961   |  
|Gain on remeasurement of receivables from sale of farms and machinery  |  |      | 19,086  |   |      |  | 214     |      |  |  | 6,682   |  
|Realized profit from derivative transactions                           |  |      |        |   |      |  |        |      |  |  | 3,777   |  
|Unrealized profit from derivative transactions                         |  |      | 2,835   |   |      |  | 16,043  |      |  |  | 8,216   |  
|                                                                       |  |      |         |   |      |  |         |      |  |  |         |  
|                                                                       |  |      | 40,051  |   |      |  | 38,000  |      |  |  | 38,073  |  
|                                                                       |  |      |         |   |      |  |         |      |  |  |         |  
|Financial Expenses                                                     |  |      |         |   |      |  |         |      |  |  |         |  
|Interest loans and financing                                           |  |      | (180    | ) |      |  | (1,083  | )    |  |  | (506    | )
|Bank Charges                                                           |  |      | (762    | ) |      |  |        |      |  |  |        |  
|Interest on payables                                                   |  |      | (10,674 | ) |      |  | (8,456  | )    |  |  | (7,461  | )
|Monetary variation                                                     |  |      | (2,328  | ) |      |  | (1,545  | )    |  |  | (2,204  | )
|Foreign exchange variation                                             |  |      | (5,688  | ) |      |  | (3,121  | )    |  |  | (2,827  | )
|Loss on reameasurement of receivables from sale of farms and machinery |  |      | (13,561 | ) |      |  | (3,380  | )    |  |  |        |  
|Realized loss from derivative transactions                             |  |      | (6,699  | ) |      |  | (16,622 | )    |  |  | (10,329 | )
|Unrealized loss from derivative transactions                           |  |      | (1,719  | ) |      |  | (4,384  | )    |  |  | (20,972 | )
|                                                                       |  |      |         |   |      |  |         |      |  |  |         |  
|                                                                       |  |      | (41,611 | ) |      |  | (38,591 | )    |  |  | (44,299 | )
|                                                                       |  |      |         |   |      |  |         |      |  |  |         |  
|Financial income (expense)                                             |  |      | (1,560  | ) |      |  | (591    | )    |  |  | (6,226  | )
|                                                                       |  |      |         |   |      |  |         |      |  |  |         |  





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|29. | Income and social contribution taxes
|--- | ------------------------------------



|                                                                                              |  |      |         |   |      |  |        |      |  |  |         |  
|--------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------ | ---- |  |  | ------- | -
|                                                                                              |  | 2014 |         |   | 2013 |  |        | 2012 | 
|Income (loss) before income and social contribution taxes                                     |  |      | (28,923 | ) |      |  | 26,376 |      |  |  | (19,445 | )
|Combined nominal rate of income tax and social contribution taxes-%                           |  |      | 34%     |   |      |  | 34%    |      |  |  | 34%     |  
|                                                                                              |  |      |         |   |      |  |        |      |  |  |         |  
|                                                                                              |  |      | 9,834   |   |      |  | (8,968 | )    |  |  | 6,611   |  
|Equity pick up/loss on investments                                                            |  |      | (240    | ) |      |  |       |      |  |  |        |  
|Management bonus                                                                              |  |      | (1,674  | ) |      |  | (1,474 | )    |  |  | (534    | )
|Net effect of subsidiaries taxed whose profit is computed as a percentage of gross revenue(*) |  |      | 8,345   |   |      |  | 14,702 |      |  |  | 6,969   |  
|Reversal of management bonus  permanent                                                      |  |      |        |   |      |  | (1,000 | )    |  |  |        |  
|Income tax credit not approved                                                                |  |      |        |   |      |  | (547   | )    |  |  |        |  
|Other permanent additions                                                                     |  |      | (704    | ) |      |  | (362   | )    |  |  | (201    | )
|IRPJ and CSLL on the profit/loss for the year                                                 |  |      | 15,561  |   |      |  | 2,351  |      |  |  | 12,845  |  
|                                                                                              |  |      |         |   |      |  |        |      |  |  |         |  
|Current                                                                                       |  |      | (2,777  | ) |      |  | (7,905 | )    |  |  | (1,841  | )
|Deferred                                                                                      |  |      | 18,338  |   |      |  | 10,256 |      |  |  | 14,686  |  
|                                                                                              |  |      |         |   |      |  |        |      |  |  |         |  
|                                                                                              |  |      | 15,561  |   |      |  | 2,351  |      |  |  | 12,845  |  
|                                                                                              |  |      |         |   |      |  |        |      |  |  |         |  
|Effective rate                                                                                |  |      | -54%    |   |      |  | 9%     |      |  |  | -66%    |  



| | (*) | For some of our subsidiaries, income tax is measured based on the regime whereby profit is computed as a percentage of gross revenue, i.e., income tax is determined on a simplified base to calculate the taxable profit
(32% for lease revenues, 8% for sale of farms and 100% for other earnings). This results effectively in taxing the profit of subsidiaries at rate a lower rate than if taxable profit were based on accounting records.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|30. | Earnings (loss) per share
|--- | -------------------------



| | a) | Basic
| | -- | -----

Basic earnings (loss) per share are calculated by dividing the profit (loss)
attributable to shareholders of the Company, by the weighted average number of common shares issued during the year. Due to the loss for the year, the shares with potential dilution are not considered when there is loss, since they would have an
antidilutive impact.



|                                                                                |  |      |         |   |      |  |        |      |  |  |        |  
|------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                                |  | 2014 |         |   | 2013 |  |        | 2012 | 
|Profit (loss) attributable to equity holders of the parent                      |  |      | (13,362 | ) |      |  | 28,727 |      |  |  | (5,572 | )
|Weighted average number of common shares issued (thousands)                     |  |      | 58,292  |   |      |  | 58,422 |      |  |  | 58,422 |  
|Effect from dilution  shares                                                   |  |      | 70      |   |      |  | 23     |      |  |  |       |  
|Antidilutive effect                                                             |  |      | (70     | ) |      |  |       |      |  |  |       |  
|Weighted average number of common shares issued adjusted by the dilution effect |  |      | 58,292  |   |      |  | 58,445 |      |  |  | 58,422 |  
|                                                                                |  |      |         |   |      |  |        |      |  |  |        |  
|Basic earnings per share                                                        |  |      | (0.23   | ) |      |  | 0.49   |      |  |  | (0.10  | )
|                                                                                |  |      |         |   |      |  |        |      |  |  |        |  
|Diluted earnings per share                                                      |  |      | (0. 23  | ) |      |  | 0.49   |      |  |  | (0.10  | )
|                                                                                |  |      |         |   |      |  |        |      |  |  |        |  



|31. | Provision for legal claims
|--- | --------------------------

The Company and its subsidiaries are involved in civil,
labor, environmental and tax lawsuits and in administrative proceedings of labor, tax and environmental natures. The provision for probable losses arising from these lawsuits are estimated and updated by management, supported by the opinion of the
Companys external legal advisors.





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Probable risks

At
June 30, 2014, the Company recorded a provision of R$3,573 (R$4,802 at June 30, 2013) related to legal and administrative proceedings whose risk of loss was considered probable, as summarized below:



|                     |  |           |       |   |                   |  |        |         |  |  |           |   |  |  |     | 
|-------------------- |  | --------- | ----- | - | ----------------- |  | ------ | ------- |  |  | --------- | - |  |  | --- | 
|                     |  | Labor (a) |       |   | Environmental (b) |  |        | Tax (c) |  |  | Civil (d) |  
|At June 30, 2012     |  |           | 1,183 |   |                   |  |       |         |  |  |          |   |  |  |    | 
|                     |  |           |       |   |                   |  |        |         |  |  |           |   |  |  |     | 
|Additions            |  |           | 105   |   |                   |  | 3,213  |         |  |  | 1,813     |   |  |  |    | 
|Monetary restatement |  |           | 96    |   |                   |  | 781    |         |  |  |          |   |  |  |    | 
|Reversal/payments    |  |           | (791  | ) |                   |  | (1,598 | )       |  |  |          |   |  |  |    | 
|                     |  |           |       |   |                   |  |        |         |  |  |           |   |  |  |     | 
|At June 30, 2013     |  |           | 593   |   |                   |  | 2,396  |         |  |  | 1,813     |   |  |  |    | 
|                     |  |           |       |   |                   |  |        |         |  |  |           |   |  |  |     | 
|Additions            |  |           | 311   |   |                   |  |       |         |  |  | 1,450     |   |  |  | 603 | 
|Monetary restatement |  |           | 234   |   |                   |  |       |         |  |  | 65        |   |  |  |    | 
|Reversal/payments    |  |           | (556  | ) |                   |  | (2,396 | )       |  |  | (940      | ) |  |  |    | 
|                     |  |           |       |   |                   |  |        |         |  |  |           |   |  |  |     | 
|At June 30, 2014     |  |           | 582   |   |                   |  |       |         |  |  | 2,388     |   |  |  | 603 | 
|                     |  |           |       |   |                   |  |        |         |  |  |           |   |  |  |     | 



| | (a) | Labor claims
| | --- | ------------

At June 30, 2014, the Company, supported by the opinion of its
external legal advisors, recorded provision for labor claims in the amount of R$582, related to labor claims filed by former employees and third parties. In most of the cases, the Companys and its subsidiaries responsibility is
subsidiary, since possible rights between outsourced companies and their former employees are challenged.



| | (b) | Environmental suits
| | --- | -------------------

As regards the environmental contingency related to the tax notice
drafted by IBAMA due to alleged degradation of permanent preservation area at São Pedro Farm. On December 31, 2013, supported by the opinion of its external legal advisors, the Company reversed the contingency provision, since, due to
the annulment action filed in relation to the tax notice, with the judicial deposit of the full amount of the penalty, the possibility of loss was classified as possible.



| | (c) | Tax suits
| | --- | ---------

At June 30, 2014, supported by the opinion of its external legal
advisors, the Company recorded provision for tax suits in the amount of R$2,388. The amount of R$2,128 refers, especially, to the alleged incidence of social contribution taxes on the payments to the Companys foreign members of the Board, and
the balance of R$260 refers to tax administrative procedures being challenged, particularly in matters related to the incidence of ICMS on operations at Araucária Farm, State of Goiás.



| | (d) | Civil suits
| | --- | -----------

At June 30, 2014, the Company recorded provision for civil
contingency in the amount of R$603 related to fine due for alleged noncompliance with contractual obligation assumed by the Company in the rural leasing agreement executed in 2012 involving Horizontina Farm.

In November 2013, the Purchaser filed an injunctive relief for anticipated production of evidence, in progress at the Court of the Judicial
District of Tasso Fragoso/MA, aiming at judicial approval of expert evidence determining noncompliance with the obligation assumed of opening, cleaning and preparing the area.

The Company deemed adequate to set up provision for amount due the possibility of legal discussion, since the obligation of opening of area,
assumed by the Company under the Contract, will possibly be challenged in courts by the Purchaser.





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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Possible risks

The
Company and its subsidiaries are parties to legal suits of civil, labor, environmental and tax natures, and administrative tax proceedings which are not provisioned, since they involve risk of loss classified as possible by the Company and its
external legal advisors. The contingencies are as follows:



|                  |  |      |        |  |      |  |        |      |  |  |        | 
|----------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                  |  | 2014 |        |  | 2013 |  |        | 2012 | 
|Civil (a)         |  |      | 12,080 |  |      |  | 6,552  |      |  |  | 6,382  | 
|Tax (b)           |  |      | 8,571  |  |      |  | 12,871 |      |  |  | 9,900  | 
|Labor (c)         |  |      | 1,125  |  |      |  | 665    |      |  |  | 1,001  | 
|Environmental (d) |  |      | 3,468  |  |      |  |       |      |  |  | 3,907  | 
|                  |  |      |        |  |      |  |        |      |  |  |        | 
|                  |  |      | 25,190 |  |      |  | 20,088 |      |  |  | 21,190 | 
|                  |  |      |        |  |      |  |        |      |  |  |        | 



| | (a) | Civil
| | --- | -----

On June 30, 2014, the Company has civil claims in the amount of R$12,080
(R$6,552 at June 30, 2013) referring mainly to: (i) declaration of nullity of acknowledgement of debt due to the purchase and sale of rice, (ii) suspension of protest of promissory note provided as guarantee upon the acknowledgement
of debt arising from purchase and sale of rice , (iii) injunctive relief for anticipated production of evidence aiming at legal approval of expert evidence determining noncompliance with the obligation assumed of opening, cleaning and preparing
the area at Nova Horizontina farm, (iv) indemnity for pain and suffering and property damages, allegedly suffered due to road accident occurred with employee of a Companys service provider in Araucária Farm, on October 29,
2011 and (v) annulment of the legal business of purchase and sale of one of the properties of Chaparral Farm, due to challenge by the seller of the validity of his representation in the property deed; and (vi) indemnity for property, pain
and suffering and esthetical damage cumulated with request for life annuity due to the accident occurred with the employee of a Companys service provider at Cremaq Farm on May 29, 2014.



| | (b) | Tax
| | --- | ---

At June 30, 2014, the Company has legal and administrative tax proceedings in
the amount of R$8,517 (R$12,871 at June 30, 2013) which refers mainly to lawsuits related to (i) non-compliance statement aiming to overturn the interlocutory decision that partially approved the credit from income tax losses carryforward
for the fourth quarter of 2007 and consequently not approving the Company offsets of the aforesaid credits; (ii) annulment action filed aiming at the annulment of tax credit related to the monthly estimates of IRPJ and CSLL for January 2012;
(iii) tax notice served for collection of ICMS tax credit on products exported by the Company; (iv) tax notice aiming at the collection of tax credit; (v) tax notice aiming at the collection of ICMS tax credits, in the amount of
R$198, based on the understanding that the Company did not reverse ICMS credits, arising from the bookkeeping allegedly undue of credits related to the acquisition of fixed assets, since it did not provide the CIAP book model C, related
to the period from January 1 to December 31, 2012; (vi) tax notice for collection of ICMS tax credit, based on the understanding that the Company shipped primary products to exporters for the specific purpose of export, alleging that
these products were not shipped abroad within the period of 180 (one hundred and eighty) days from the exit of the goods.



| | (c) | Labor
| | --- | -----

At June 30, 2014, the Company has labor claims in the amount of R$1,125
(R$665 at June 30, 2013) filed by former employees and third parties, mainly claiming indemnities and the recognition of employment relationship.



| | (d) | Environmental
| | --- | -------------

At June 30, 2014, the Company has environmental suits in the amount
of R$3,468, related to annulment action proposed before the Federal Court of Goiânia, State of Goiás, aiming at the annulment of tax notice for alleged degradation of permanent preservation area at São Pedro Farm.

On October 15, 2013, the Company made the judicial deposit in the amount of R$3,056 corresponding to the amount of the fine applied.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|32. | Commitments
|--- | -----------



| | a) | Contract for grains supply
| | -- | --------------------------

The sales price of soybean may be determined by the Company
for the total or partial volume promised to be sold up to the date of delivery. The price, when established, is determined according to a contractual formula based on the soybean quotation at Chicago Board of Trade (CBOT). The price
established in US dollars is settled at the end of the commitment period in reais considering exchange rates defined in contract some days before the financial settlement date.

Based on the terms of the contract, the Company is subject to fines in the event of non-delivery of the committed volumes. Presently, the
Company has no amount recorded related to fines, since all the contracts entered into were delivered within the term established.

At
June 30, 2014, there are commitments signed for future delivery of 14,295 tons of soybean.

Corn is sold as powder and the price is
established in reais upon the sale. At June 30, 2014 there are commitments signed for 12,636 tons of corn.



| | b) | Contracts of sugarcane supply between Brasilagro and ETH Bioenergia
| | -- | -------------------------------------------------------------------

On March 2008, the
Company is part to two contracts for the exclusive supply to ETH Bioenergia of the totality of our sugarcane production over two full crop cycles (for sugarcane, one full crop cycle consists of six agricultural years and five harvests, renewable
upon the agreement of the parties). One of the contracts refers to an area of approximately 5,718 hectares at Araucária farm and the second, to approximately 3,669 hectares at Alto Taquari farm. The price per ton, for the purpose of these
agreements, is determined based on Total Recoverable Sugar (ATR) price per ton of sugarcane effectively delivered, with ATR corresponding to the quantity of sugar available in the raw material, minus sugar content lost during the production process,
multiplied by the market prices of sugar and ethanol sold by regional plants in the internal and external market, in each case.

As
determined by the São Paulo Council of Sugarcane, Sugar and Alcohol Producers (Conselho de Produtores de Cana, Açúcar e Álcool de São Paulo), or CONSECANA, for the year ended June 30, 2014, sales of our
sugarcane production to ETH Bioenergia were of R$39.4 million, (R$ 62.6 million at June 30, 2013), representing 29% of total revenue. The purpose of contracts is not to secure a more favorable price than the market price, since we expect
that the ATR price as determined by CONSECANA will be generally equivalent to the market price, but rather to secure the sale of our sugarcane production over the long term.

The amounts of sale of sugarcane previously mentioned corresponded to 570,820 tons of sugarcane delivered in the current year up to
June 30, 2014 and 1,047,791 tons of sugarcane delivered up to June 30, 2013. The price per ton of sugarcane delivered was calculated based on the Total Recoverable Sugar (ATR) assessed on sales dates. The future estimated quantity of
sugarcane to be delivered is difficult to determine due to the fluctuations and variability in market value and harvest productivity.



| | c) | Lease agreement Partnership (i)
| | -- | -------------------------------



|                |  |      |     |  |      |  |       |      |  |  |       | 
|--------------- |  | ---- | --- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                |  | 2014 |     |  | 2013 |  |       | 2012 | 
|Lease agreement |  |      | 535 |  |      |  | 1,166 |      |  |  | 1,189 | 

On July 13, 2011 and September 15, 2011 the Company entered into two agreements to lease farms
(Partnership I) both located in the municipality of Jaborandi, the state of Bahia. The areas of 5,192 are used for planting of soybean, corn, cotton and similar crops, as well as other long seeds whose growing period does not exceed the term of the
agreement. The agreements also set forth: (a) a preference right with respect to lease renewal, as well as a (b) preference right for the purchase of the farms.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





The calculation of the amount of lease is based on the soybean quotation on the day prior to maturity, multiplied by the quantity of bags
established in the contract. As the lease amount is variable, the lease contract complies with the definition of an operating lease.

On
June 16, 2014, the Company executed the dissolution of the partnership which corresponds to an area of 3,691.9 hectares.

The total
lease agreements to be paid in the long term according to these agreements corresponds to 40,500 bags of soybean, of which R$536 in up to one year and R$1,634 from one to five years.



| | d) | Lease agreement Partnership (II)
| | -- | --------------------------------



|                |  |      |     |  |      |  |   |      |  |  |   | 
|--------------- |  | ---- | --- |  | ---- |  | - | ---- |  |  | - | 
|                |  | 2014 |     |  | 2013 |  |   | 2012 | 
|Lease agreement |  |      | 294 |  |      |  |  |      |  |  |  | 

On October 11, 2013 the Company executed a rural partnership agreement to operate a farm
(Partnership II) located in the municipality of Ribeiro Gonçalves, in the state of Piaui. The partnership shall be effective for 11 (eleven) crop years, beginning at the date of its execution and estimated ending on June 01, 2024. The
areas shall be used to plant soybean, cotton, corn and similar crops, as well as other long seeds whose growing period does not exceed the term of the agreement.

This partnership agreement complies with the definition of operating leasing. The payment will always be in species (soybean grains), to be
deposited until June 30 of each crop year, in warehouse located at a distance not above 100 km of paved road (one hundred kilometers) from the partnership area or at a distance in unpaved road with the cost of freight equivalent to 100 km of
paved road. The quantity of bags to be paid during the effectiveness of the agreement may vary due to two variables: the productivity and the area effectively planted. According to this agreement, the minimum quantity to be paid in the long term
would correspond to 608,000 bags, of which 60,800 bags of soybean in up to one year, 304,000 bags of soybean from one to five years and 243,200 bags of soybean with more than five years up to the end of the agreement.

The partnership agreement may be terminated by the parties, at any time, through notice no longer than 120 days before beginning of the
harvest and foresees the following fines to the Company:



| | (i) | Termination in the 1st harvest year  Fine equivalent to 16 bags/ha of the production area;
| | --- | -------------------------------------------------------------------------------------------



| | (ii) | Termination in the 2nd harvest year  Fine equivalent to double the participation applicable to the granting Partnership in the previous harvest year; and
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | As from the end of the 2nd harvest year, with the end of the Plan of Opening and Transformation, no fine will be due.
| | ----- | -----------------------------------------------------------------------------------------------------------------------

In the case of the lessor, the indemnity amount will be related to the proven investments made.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





|33. | Transactions with related parties
|--- | ---------------------------------

The primary related party transactions are as
follows:



|                                             |  |      |        |   |      |  |     |      |  |  |   | 
|-------------------------------------------- |  | ---- | ------ | - | ---- |  | --- | ---- |  |  | - | 
|                                             |  | 2014 |        |   | 2013 |  |     | 2012 | 
|Current assets                               |  |      |        |   |      |  |     |      |  |  |   | 
|Cresud (a.i)                                 |  |      | 723    |   |      |  | 347 |      |  |  |  | 
|                                             |  |      |        |   |      |  |     |      |  |  |   | 
|                                             |  |      | 723    |   |      |  | 347 |      |  |  |  | 
|Noncurrent assets                            |  |      |        |   |      |  |     |      |  |  |   | 
|Cresca (b.i) (b.ii)                          |  |      | 26,068 |   |      |  |    |      |  |  |  | 
|                                             |  |      |        |   |      |  |     |      |  |  |   | 
|                                             |  |      | 26,068 |   |      |  |    |      |  |  |  | 
|Current liabilities  trade accounts payable |  |      |        |   |      |  |     |      |  |  |   | 
|Cresud (a.i)                                 |  |      | 218    |   |      |  | 183 |      |  |  |  | 
|Cresca acquisition  Cresud Group (a.ii)     |  |      | 33,019 |   |      |  |    |      |  |  |  | 
|                                             |  |      |        |   |      |  |     |      |  |  |   | 
|                                             |  |      | 33,237 |   |      |  | 183 |      |  |  |  | 
|Income statement                             |  |      |        |   |      |  |     |      |  |  |   | 
|Cresud (a)                                   |  |      | 1,194  |   |      |  |    |      |  |  |  | 
|Futures and options                          |  |      | (55    | ) |      |  |    |      |  |  |  | 
|                                             |  |      |        |   |      |  |     |      |  |  |   | 
|                                             |  |      | 1,139  |   |      |  |    |      |  |  |  | 
|                                             |  |      |        |   |      |  |     |      |  |  |   | 



| | (a.i) | Expenses and revenue related to Due Diligence of new acquisitions and implementation of the budget and controls system and reimbursement of general expenses;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a.ii) | Acquisition of advisory contract from Cresud  R$2,130 discounted at present value, maturity on 12/12/2014, restated based on the foreign exchange rate variation (US$) and interest of 7.0% p.a.;
| | ------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a.iii) | Financing payable to Cresud  R$ 18,723, discounted at present value, maturity at 12/12/2014 restated based on the foreign exchange variation (US$) and interest of 7.0% p.a.;
| | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a.iv) | Acquisition of 50% interest in joint venture payable to Cresca  R$ 11,082 discounted at present value, maturity at 12/12/2014, restated based on the foreign exchange variation (US$) and interest of 7.0% p.a.; and
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a.v) | Contingent consideration for the acquisition of 50% of interest in joint venture payable to Cresca in the amount of R$1,084.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------



| | (b.i) | Accounts receivable from Cresca for assumption of financing from the company Helmir  R$21,807, maturity at 12/31/2016 restated based on the foreign exchange variation (US$) and interest of 12% p.a.; and
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b.ii) | Loan receivable from Cresca granted on 12/23/2013 in the amount of R$ 4,261, with interest of 12% p.a. and undetermined maturity.
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------



|34. | Insurance
|--- | ---------

The Company and its subsidiaries maintain (i) civil liability insurance
for employees working at the farms, (ii) insurance for vehicles and machinery, (iii) insurance for Directors and Officers (D&O) and for other Board members. The coverage amount is considered sufficient by management to cover
adventitious risks over its assets and/or responsibilities. The Company assessed the risk of farm buildings and facilities owned by the Group, as well as its inventories and biological assets, and concluded that there is no need for other types of
insurance due to low chances of occurrence of risks.



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Brasilagro-Companhia Brasileira de Propriedades Agrícolas

Notes to the financial statements

June 30, 2014

(In thousands of reais, except if stated otherwise)





Below is the table of the liabilities covered by insurance and the related amounts at June 30, 2014:



|                                          |  |                       |        | 
|----------------------------------------- |  | --------------------- | ------ | 
|Insurance type                            |  | Coveragethousands R$ |       
|Vehicles                                  |  |                       | 1,817  | 
|Civil liability (D&O)                     |  |                       | 30,000 | 
|Civil, Professional and General liability |  |                       | 5,000  | 
|Machinery                                 |  |                       | 5,829  | 
|Fire and damages in improvements          |  |                       | 940    | 
|Fire/lightning/explosion (office)         |  |                       | 500    | 
|Electrical damage (office)                |  |                       | 100    | 

Given their nature, the assumptions adopted are not part of the audit of the financial statements. As a
consequence, they have not been audited by our independent auditors.



|35. | Subsequent events
|--- | -----------------



| | a) | Cresca
| | -- | ------

On April 07, 2014, Cresca sold 24,624 undeveloped hectares for the amount
of US$14.8 million, which was recognized on July 14, 2014, when the ownership of land was transferred. After this transaction and the transaction described in Note 14 c), Cresca will have 117,331 hectares, of which approximately 60,000 hectares
are suitable for agricultural purposes.

On July 09, 2014, Cresca purchased 30,500 has according to transaction described in Note 14
c). In this transaction, the Company transferred to Cresca the amount of R$5,782.



| | b) | Loan for use agreement  Araucária Farm
| | -- | ---------------------------------------

On July 8, 2014 the Company
executed between the same parties, a loan for use agreement through which Brasilagro obtained, at no cost, the right for free and temporary use of 913 has suitable for agricultural purposes. The purpose of the loan for use agreement is to allow
Brasilagro to finalize the crop and harvest of sugarcane currently planted in the plots subject matter of the agreement, as the sugarcane was acquired by the purchaser of the farm.



| | c) | Loans and financing
| | -- | -------------------

On July 25, 2014, the amount of R$44,884 was paid to BNB Bank
relating to the portion of Financing of Harvest Cost, of which R$30,390 referring to Brasilagro and R$14,494 to Jaborandi.



F-75